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5 spending habits to cut out of your life

29th November 2017

Having full control of your personal finances isn’t just about paying off debts and keeping some savings to the side. It’s also about spending your money wisely and reining in those more extravagant purchases. Most of us are guilty of splashing out on products and services that we don’t need, incurring costs that can easily be avoided with a bit of foresight and willpower.

Bad spending habits add up in the long run, and sometimes it’s the small changes that make the biggest difference. You will feel better and more relaxed knowing that your money is being used for necessary and valuable purposes. In other words, better spending habits guarantee a more fulfilling lifestyle as well as a healthier bank account. In this post, we will go through some of the main spending habits to cut out when aiming to revamp your personal finances for the better.

 

Impulse buying

Many of us purchase goods impulsively on a daily basis, often because we are tempted by the allure of a low price or exciting offer. Especially with the ease and availability of online shopping, these impulse purchases are all the more rampant. Furthermore, big businesses will do nothing but capitalise on these impulses, with sales held every other week and products made to look irresistible with clever marketing.

It’s time for you to cut through the noise, and think about what you really need to spend your money on. One way of doing this is waiting a day before buying an item that tempts you – give that initial excitement some time to wear off so that you can properly assess the necessity of owning another pair of trainers. More often than not, you will decide against the purchase after some reflection. It’s also important to make good use of shopping lists, as this will focus your spending on the items that you need. Plus, it will force you to spend much less time aimlessly browsing the supermarket – figure out what you need and only shop for those products.

 

Not doing research

Every industry is now saturated with choices, and it can be difficult to think for yourself amidst all the tempting offers and misleading deals. Whether it’s an energy supplier, an insurance product, a holiday package, or just a new television, it’s always best to do lots of thorough research before rushing into a purchase.

You should consider whether the big brands are really the best. They may have the most prominent advertising and the most recognisable name, but do they offer the most affordable quality product or service? To stop spending money on needlessly expensive brands just because they are shouting the loudest, perhaps you could do some research on the lesser known brands, or try out some cheaper products next time you’re shopping for essentials.

 

Luxury spending

It’s very easy to get carried away with our spending when it comes to luxury products and experiences. Buying a £3 cup of coffee on the way to work every day, eating dinner at restaurants several times a week, routinely buying lottery tickets and bottled water – all of these are strictly non-essential and could definitely be cut down with a heavy dose of willpower.

According to the Office of National Statistics: “UK households spent more than £45.00 a week on restaurants and hotels” in 2015/16, marking an increase on previous years. These costs quickly add up and cause serious financial problems. The money would be better in savings accounts, emergency funds, mortgage payments… whatever you need to balance out your spending habits and reserve these luxuries for special occasions.

 

Falling for deals

When shopping, remember that sales are there to make you buy more not help you save more. Of course, when used very occasionally for individual purchases, making the most of discounts and deals can be a helpful saving tool. But problems arise when you fall for deals every time you see them displayed in shop windows or in your emails. More often than not they simply prompt people to buy products they do not need, just because they are cheaper than usual. There’s no sense in saving money by spending more money, so try and resist the sales next time you feel tempted.

 

Unnecessary transport

UK households spent on average over £70 on transport in 2015/16, making it the highest source of household spending for that year. Of course, for many of us using transport is a necessity in order to get to work every day. But on the off chance that you are able to save money on your transport in any way then it’s certainly a route worth going down!

Perhaps you find yourself hopping on the bus to work when it only takes 15 minutes on foot. Maybe you take the train twice a day and haven’t yet bought a railcard. Or you may fancy investing in an electric car, therefore saving yourself hundreds on petrol every year. Have a think about streamlining your transport costs and some great opportunities might spring to mind.

 

IMC provide expert advice covering all areas of the financial market, from mortgages and wills to insurance and and estate planning. We will provide solutions that are tailored to your individual needs and circumstances, so feel free to get in touch for a professional and personalised service.

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