Still feeling the pinch after Christmas? I blogged the other day about making extra money, but my ideas may not be feasible for everyone. If you can trim all the flab off your spending and make things leaner that will have the same impact as extra income. Some people just don’t know where all the money goes!
A tried and tested way to find out what your spending habits really are is to keep a diary. It is a bit of a fag, but it is really helpful – trust me! First find a suitable notepad – it doesn’t have to be fancy; a cheap reporter’s notebook will do. Write down every single purchase that you make during the course of your day, from 80p for a chocolate bar, £2 for a coffee, £5 for lunch, £3.50 for a magazine, £10 for drinks in the pub, £30 for petrol, £3 for sweets for the kids, etc. It all adds up.
Make a daily total. Write some notes too that might help explain your spending, such as ‘kids on school holidays’, ‘worked late’, ‘had friends over’, ‘felt depressed’. After a few weeks of keeping your diary you will start to understand your habits and motivations for spending money.
Now start to scrutinise your spending. What was essential, what could have been avoided, what could have been done more cheaply?
If I take my own examples, it is clear that only the lunch and petrol were essential purchases. The others were wants rather than needs. However, we all need a little treat sometimes, so how to scale down the expense?
Chocolate bars – multipacks are so much cheaper than buying these singly or from a vending machine. Keep some in the cupboard/your handbag for when you need a boost.
Ditto sweets for the kids – supermarket multipacks are the best value, but keep them hidden away for an occasional treat rather than every day.
Magazines – such an expensive habit. You can buy them really cheaply (3 for £2) on market stalls. They won’t be the current issue, but they churn out the same stuff each season anyway! My library service offers a free e-magazine service called Zinio. If you are a member of Essex libraries check it out. If not, ask your library if they offer anything similar.
Tea/coffee – if you are going out you could take a flask. I always do this for picnics. For trips into town I take a bottle of water and wait until I get home to make my own tea or coffee. A lot of work places provide drinks but if they don’t take your own milk, teabags, coffee and mugs and you are good to go.
Lunch is an essential, but it is clearly much cheaper to take a packed lunch from home rather than buying it out. Even a prepacked sandwich with a cake can set you back a fiver.
Drinks in the pub? I rarely do this as it costs so much. How about getting together with friends at home with a few bottles from the supermarket?
These are just a few examples of where you can save money on small purchases. Another advantage is that most of the above mean you will avoid going into any shops other than the supermarket for your regular grocery shop, so if you are somebody who gives into the impulse purchases you are less likely to encounter temptation (and if you choose the discount stores such as Aldi and Lidl there is even less choice and temptation on offer).
How do you keep your spending under control?