Trying to put away some savings each month will help you feel like you’re bossing your personal finance situation, no matter how little you save. Rebecca O’Connor, co-founder of money tips website Good With Money, said: ‘It’s hard to feel like you can save when you’re earning under £25k, but it’s doable. Set up a direct debit for a realistic monthly amount at first, say, £50 a month, and arrange for it to come out of your account at a time of the month you won't really miss it. You can find out just how much you could save and how to budget each month using this quick and** easy tool.**
‘My savings go out after my essential bills, but before I start spending on eating out or clothes. If you feel you can increase this amount after a few months, do it gradually. You will give up if saving leaves you struggling.’
Here are some reasons you might find yourself with a near-empty bank account each month and what you can do to swerve these totally-avoidable habits.
Using contactless cards
OK, OK, given just how handy they are, it’s going to be pretty much impossible to rule out contactless tech altogether now. If you find the magic wand-like quality of the contactless tap is making you spend money more than you would, it might be time to throw back to the old chip and PIN. If anything, avoiding contactless where possible helps you spend more mindfully, and I’ve spoken to multiple people who swear by taking cash out of an ATM instead so they can tangibly see how much cash they’re parting with (and boy, is it such sweet sorrow). Taking cash out can also help you budget better on a daily basis - if you haven’t got the coins to buy that magazine, maybe think about if you really need to be buying three a week.
Forgetting to cancel free trials
I’m a repeat offender when it comes to this, and it’s something I need to keep better tabs of. If you’re also a sucker for a 30-day free trial, lots of sites don’t warn you when it’s coming to an end, so set reminders on your phone to avoid getting caught out. Not so bad if it’s under a tenner, but some trials - such as Amazon Prime - will charge you a yearly fee that could be a bit of a headache to get back if you’ve used Prime services unknowingly. Netflix, Apple Music and NOW TV are just some that allow you to cancel at the point of signing up, so you can enjoy the rest of your freebie run guilt-free.
Being a sucker for online shopping
If you can’t figure out just where your money goes each month, but rely on a daily scroll of ASOS to get you to sleep each night, this could be the money mistake you need to get a hold of. A recent study by the Money and Mental Health Policy Institute* found that late-night online shopping can have a negative impact on your mental health , with 37% of people regretting an impulse purchase on the internet .
Online shopping changed our spending habits dramatically and it’s the way most of us shop these days (I mean, braving the high street on a Saturday afternoon isn’t always the most ideal way to spend the weekend). It’s convenient if you’re busy working all week, or are trying to find a half-size shoe they don’t stock in store. But the temptation is so easy to cave in to: with promotional emails and daily ‘exclusive’ online deals it can feel like we’re getting a bargain, whereas what we’re really getting is three parcels a week of stuff we can’t really afford. If you want to cut down your Paypal outgoings each month, it’s worth asking yourself if, a) you need the thing and b) you’d buy it if it wasn’t on offer. It’s also helpful to remove your card details from the AutoFill feature on your phone/laptop, if you’re finding it too easy to click ‘Buy’. It prolongs the purchase period and gives you time to reconsider if another pair of shoes are really within your means right now. Removing card details from automatically filling in will also be better for your online security. Ding!
Buying cheap ‘n’ naff things for a quick retail fix
Spending less - but on higher quality stuff - is easier said than done, especially if it never feels like you can afford to buy anything over £50 because you’re not earning loads. During Christmas last year, captured by the allure of luxurious things in glossy December issue magazines, I vowed that I would buy less, but spend more: taking better care of things and hope they’d last me a lifetime (or a few years at least). As I said, easier said than done, and I am still very much prone to a quick fix buy on the way home from work. According to financial experts (read more), you should only be spending 5% of your monthly salary on clothes. So if you take home £1,600 a month, you should be spending no more than £80 a month in Zara. If you’re desperate for a wardrobe overhaul, you might feel like filling up your shopping basket with six things on pay day (that’ll likely have fallen apart in the wash by the next), or alternatively, you could hold back and buy six higher-quality pieces over six months and build a wardrobe to be proud of. Not spending a penny more, but you’ll have more to show for it.
Signing up to a pricey phone contract
If you work from home and don’t use that 500GB of data you pay for every month, why not consider downsizing your contract? Your network provider will most likely charge you for cancelling early (you’ll usually have to pay however many months you’ve got left) but they could be up for negotiating a cheaper tariff on their network if you explain your circumstances. GiffGaff is a great SIM-only option that gives you a little more freedom over your contract price. If you’re paying for your Wi-Fi, there’s no real need to be paying for unlimited mobile data too. Keep tabs on how much you’ve got left over each month (most providers have an app that can do this) and see how many £s you can cut back on each month.
Paying too much for your household bills
If you despair at how much your bills add up to each month, the average household can save £300 a year by switching their gas or electricity supplier (read more).
There are loads of comparison sites out there, and it should only take around 20 minutes to check. Once you switch, the energy supplier will do all the hard work for you, and you could be paying cheaper bills within three weeks. It really is worth checking out, especially if you’ve been on the same tariff for a few years - or have never looked into it at all. We recently switched our electricity and broadband supplier and not only are we paying less, we got a nice cashback reward from our new Wi-Fi supplier and the internet runs much faster too. I’d be lying if I said I sorted it out myself (god bless my organised flatmate who checked it out for us), but it’s nice to know we’re not being overcharged for simple everyday things that you’d rather not be forking out your Topshop funds for.
***FSCS *has an easy tool that will help you find out how much money you could save now and for your future. It's completely free and will tell you how you could manage your money better in seconds. FSCS are the people who protect your money for free, from £1 up to £85,000 in UK banks and building societies.
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This article originally appeared on The Debrief.