If you can’t wait for the day your salary hits your bank account so you can satisfy your spending urge - then you’re not alone. Last year, nearly a fifth (19%) of Britain’s felt the urge to treat themselves when they got paid, according to research conducted by Confused.com*
But what impact will these sudden impulse buys have on what you’ve got left for the rest of the month?
Here’s our thoughts on how to bring out the saver in you, and shrug off the temptation to be a payday millionaire.
Set some financial goals
It’s good to have something to aim for. Whether it’s paying off your credit cards or saving for a deposit on a new house with your other half, if you set some financial goals, you’re more likely to be careful with your money and stick to your budget.
The psychology of habit
It’s easy to get into the habit of spending. The endorphin kicks that come with a spending spree are powerful, and hard to resist. But there are ways of breaking the spending cycle.
- Resist those supermarket deals by doing your monthly shop online
- Recognise your triggers: what makes you spend? Is it being in a particular emotional state, like feeling low, tired or bored?
- Take a tip from athletes and use the power of visualization to make your savings goal more realistic.
- Act as if your week after payday is the one before payday. That way, you’ll spend your money as if you’ve already run out.
- Use a budgeting tool like Moneyhub* to track and analyse your spending.
If you have joint finances – you can help motivate each other to kick the habit.
Make a budget and stick to it
If you’re finding you’re regularly overspending and need to get on top of your budgeting, here’s a simple way to get started:
- set up separate bank accounts for your various outgoings (regular monthly bills, holidays, back-to-school, savings, and so on)
- calculate your outgoings
- work out your joint income
- check your outgoings and income balance
- set up standing orders to each of the accounts
- review the set-up regularly
- consider using online budget planners like YNAB.com*
- look at where you could cut back on things.
Save a bit where you can
Once you have a clearer idea of where you’re over-spending, you should be able to work out ways of reducing your outgoings in these areas. If you share your finances - challenge each other and discuss how to cut back, one area at a time.
If you save a bit here and there, you may be able to redirect money towards one of your goals like topping up savings or paying off a bit of the mortgage.
There are some obvious ways of cutting back, but they can be time-consuming, so focus on one or two at a time.
- Keep looking for better deals on your utilities, mobile phone, and home broadband.
- Switch home insurance, car insurance providers, if you can find better rates.
- For regular savings on petrol and supermarket shops, get a cashback card* or join a cashback website *.
- Cut back on non-essential spending, like daily coffees and other treats.
- Avoid taking on debt, as servicing it will only add to your outgoings.
Live for the present or plan for the future?
If you budget carefully and stick to your plan – and try to reduce the temptation of being a payday millionaire, you should have enough money to enjoy today and still put something aside for tomorrow.
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