We are a nation addicted to the feelgood buzz of a new purchase. But if there’s one thing the enforced slowdown of recent months has taught us, it’s that we can usually live comfortably with a lot less. Suddenly, the rampant consumerism that we know is bad for the planet, our bank balances and our mental health seem even more bad taste than ever. But bad money habits are hard to break, and as the human brain is wired to repeat patterns, it can be hard to turn over a new leaf. So if you’re reflecting on your financial decisions and feeling like it’s time for a rethink, read on.
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Track Your Spending
It’s surprising how many of us don’t have a real grip on what we spend in an average week or month. If that’s you, then it could be time to go back to basics with a personal budget. Take the time to list out in a spreadsheet precisely what income and outgoings you have, making sure to include any credit card payments and other debts. Then take a long, hard look at how the spending stacks up. Identify the areas where you are overspending and need to cut back. Give your financial commitments a little makeover – including things like cancelling unused subscriptions, considering debt discharge and shopping around to make sure you have the best deals on mortgage payments, utility costs and other fixed costs.
Set Up A Rainy Day Fund
Having savings gives us a choice in a difficult situation, and having a small cushion of money behind you can open up options where you don’t have to rely on credit. Building up a bit of financial comfort can seem complicated when the cost of living is so high, but get into the habit of setting a saving goal and ‘paying yourself’ immediately that your paycheck hits your account. Otherwise, you may struggle to find the money to put into savings later on in the month. Similarly, opting into card roundups – where each transaction you make on a card is rounded up to the nearest dollar, and the difference automatically put into your savings.
Stop Your Impulse Spending
How many times have you fallen into the trap of a purchase you regret? We shop for many reasons, and very few of them are actually about need. To become a more conscious consumer, It helps to create distance between you and the thing you’re tempted to buy. Make it a rule that you never purchase anything at first sight. It’s amazing how many ‘must-haves’ lose their power once you’ve walked away. Either keep a list on your phone of items you like or take a photo of them to add to a ‘wishlist’ that gets reviewed periodically. Even if you still want something, blocking an immediate buy means that you have time to compare prices online and make sure that you are getting the best deal if you do go ahead and make a purchase.