Are you the kind of person who carefully considers every purchase? Do you research what you’re going to buy in advance, and make sure you stick to your budget? Or are you more likely to end up with purchases that you regret, because you buy on impulse?
Having bad spending habits isn’t as uncommon as it seems. A lot of us struggle with not only making the most of our cash but figuring out how to increase our savings too. If you feel like you need to make a change to the way you spend, you’re in the right place.
Here are a handful of bad spending habits, and how you can break them.
Probably the best-known kind of negative spending habit, is impulse buying. This is when you buy something on a whim, without properly thinking about it. For instance, if you buy a new dress because it catches your eye when you’re shopping with a friend, that’s an impulse purchase.
On the other hand, if you decide to take out a loan for a new laptop because it will help you to go back to school, that’s a carefully considered transaction. To avoid issues of impulse buying, make sure that you always shop with a list – whether you’re buying clothing, home essentials, or food. If it’s not on the list, don’t buy it. It’s also worth delaying unnecessary purchases, so you have time to think about whether you need them or not.
Alternatively, try shopping with someone else, so you have someone to keep you on track if you start to stray away from your list.
If you need to spread the cost of a large expense out over a while, or you need instant access to money for an emergency, the best solution is rarely a credit card. Unfortunately, it’s often very easy to end up with credit card debt when you’re constantly using your card to pay for the things you need, instead of cash.
Credit cards can make us feel like we have unlimited access to money. However, the truth is that you actually end up with more debt than you often plan for. Rather than just turning to your credit card every time your funds are running low, consider re-evaluating your budget and asking yourself whether you need to make some changes.
If your budget is fine, maybe you just need to coach yourself on using cash again? Try to reserve your credit card only for absolute emergencies and focus on using cash for everything that you can buy in-person.
Banks make huge amounts of cash from overdraft fees. Just because you have an overdraft, doesn’t mean you should necessarily be using it. Instead, it’s worth looking into how you can adjust your budget to ensure that you’re never spending more than you earn. You could also set up credit and checking alerts that let you know when you’re about to reach your overdraft.
In an ideal world, you’d completely avoid overdrafts and make sure that you didn’t even have one on your checking account. However, if that’s not an option for you, try making sure that you’re at least paying what you owe on time. Setting up a direct debit or standing order for anything that you owe will make it less likely that your next wages end up totally consumed by fees.
Got a gym membership that you’ve never used, but feel guilty cancelling? It’s time to let that subscription go once and for all. Spending money on things that you don’t really want or need just because you feel like you should be is a terrible spending habit. Ultimately, it means that your money is just going out of the window each month, when it could be going towards things you want.
Take a look at your credit and debit card statements and ask yourself if there are any payments there for services you aren’t using. If you notice anything unnecessary, get rid of it.
In a similar way, try to avoid shopping for emotional reasons alone. Shopping addiction is a very real worry for some people, particularly when life gets stressful. If you know that you’re more likely to spend when you’re in a bad place, consider leaving your card or bank account details with a trusted family member until you’re in a better place.
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