Setting a course for financial success is a goal shared by most Britons, but things don’t always work out as planned. Monthly outgoings quickly add up to a significant expense, so it can be challenging for some UK earners to break the payment cycle and make headway, reaching their financial goals. These customary living costs include standard expenses, such as food, housing, insurance cover, car costs, and a host of additional monthly bills.
Beyond these basic spending requirements, UK families also face expenses related to entertainment, travel, and other discretionary purchases. Unfortunately, after these financial demands are met, there isn’t always much money left for impulse spending. In fact, most consumers turn to credit cards each month to cover the cost of impromptu expenditure.
Revolving credit accounts facilitate efficient impulse spends, which is a mixed blessing for most users. On the one hand, using plastic is fast and straightforward, making for fast transactions. At the same time, however, these trouble-free impulse spends can drag down your finances, resulting in problem debt.
If impulse spends interfere with your financial balance, it may be time to tamp down unnecessary spending and get your finances back on track. For fast results turning things around, start with these spending strategies, and then add your own safeguards against unwise impulse spends.
Adopt a Waiting Period
Impulse spending is unplanned, so you’re not always prepared to make prudent split-second spending decisions. Too often, this can result in unnecessary expenditure. If you’re prone to making bad decisions at retail stores or shopping online, consider adding a waiting period before going through with purchases.
When something strikes your fancy, luring you to spend money, taking some time to think it through can help you measure the value of a purchase. Do you really need the item? Or are you only considering it because the possibility is before you? Waiting 24 hours before going ahead with the spend gives you time to answer these questions, ensuring your money is well spent. You may be surprised how much your thinking changes as you take time out to weigh the advantages and disadvantages of each spend.
It is thought each Briton typically spends nearly £200 a month on impulse buys. From minor spending on things like confectionary and coffee to bigger buys, such as home furnishings and clothes, the habit tallies nearly £150,000 for each individual over the course of a lifetime. With many of these purchases paid with credit cards, adding to personal debt, cost-conscious shoppers need all the help they can get, heading off unwise spending.
Waiting a period of time before going through with major purchases is an effective way to reduce impulse spending on substantial items. Still, the strategy hardly makes sense for small, everyday purchases. What you can do, however, is minimise impulse spends on minor items by sticking to a cash-only approach. Instead of reaching for plastic, use cash for daily spending. If your pocketbook’s empty, take it as a sure sign you can do without the spend.
If your finances are in dire shape or efforts to reduce impulse spending have failed, drastic measures may be required, turning things around. An outright spending freeze accounts for your customary outgoings but puts strict limits on discretionary spending. Freezing impulse spending not only creates an opportunity for you to catch up with payments and savings, but you can also use the period to evaluate spending habits.
During the freeze, keep track of the things you might have purchased, if not for taking the break. You’ll likely feel the difference in your personal cash flow, but noting the savings drives home how much your impulse spending habits actually cost.
Some expenses are more easily reconciled than others. Genuine needs, such as housing, sustenance, and transport, are expected, so they’re accepted into your budget. Impulse buys, on the other hand, aren’t always justified. If your budget suffers, under the weight of ill-advised purchases, take steps to get back on track before you’re problem becomes unmanageable.