Do you love new things? Maybe it’s not something you need, or you probably have a few similar pieces lying around at home? Yet, the adrenaline rush when you swipe your card or make a new purchase and the counter goes Ka-Ching, makes every rationale leave your body.
Whether you are a shopaholic, spendthrift or just someone who spends extravagantly, you probably have a love-hate relationship with money. You love spending money, yet you never seem to have enough.
During emergencies, do you find 10 odd designer bags hanging on your cupboard, yet none has a pound in it?
While responsible credit options like Salad loans can provide a vital safety net during an unexpected financial crisis, the best way to protect your future self is to build a buffer through mindful budgeting.
Is the thought of budgeting making you panic? We’ve got some easy hacks that will help you save money without breaking a sweat.
1. Follow the 48-Hour Rule
Many people who suffer from anxiety, stress or boredom often resort to shopping as a coping technique. It is a similar psychology to people drinking, consuming hallucinogens or smoking.
If you are doom-scrolling on your phone at midnight and come across something beautiful on an e-commerce portal, and just as you are about to make a purchase, you think Can I afford it? Should I buy it?
In such a scenario, give yourself 48 hours before making the purchase. This is usually a cooling-off period, allowing you to reflect on your decision. Most of the time, you don’t feel the urge to buy anymore.
2. Prioritising Debt Repayment
If you are a spendthrift, you’ve probably got huge credit card bills and store credits. Most months, you are probably paying the bare minimum, sometimes not even that. This leads you into persistent debt; you pay more towards interest and charges than towards repaying the principal.
To deal with this, you can try one of the two most popular debt repayment methods, namely the avalanche and snowball methods.
In the avalanche method, you can prioritise debts with the highest interest rates, such as credit cards and payday loans. In the snowball method, pay off the card or loan with the smallest amount first. For both cases, you make the minimum payment for all your debts before diverting the excess cash.
3. Use Reverse Budgeting
In traditional budgeting techniques, you first allocate money for expenses like debt repayment, rent, bills, groceries, entertainment, and shopping, and then the remaining towards savings. However, to be honest, the remainder probably ends up being spent rather than saved.
To address this, try the reverse budgeting technique. You first set aside money for savings and investments, and the rest is then allocated for spending. This way, saving will not be an option but will actually happen.
4. Use Cash
If your credit card bills are making you stay awake at night and fueling your midnight splurging, the best way to deal with it is to ditch the plastic for cash. At the start of the month, withdraw cash and set aside a set amount under different categories in separate envelopes.
For example, set aside £150 for groceries, £375 for utilities and bills, £100 for transportation and £200 for entertainment, including movies, coffee and eating out. Once you’ve spent the money in the envelope, you cannot spend more until the budget resets.
When you are following this budgeting hack, don’t forget to leave the cards at home. This will allow you to check your impulses, be more mindful of your spending habits and have accountability.
5. Turn Budgeting Into a Game
Budgeting can feel boring, especially when there are such exciting things to buy. To avoid feeling overwhelmed, turn saving and budgeting into a game. The no-repeat challenge entails that if you’ve bought something non-essential on Monday, like ordering food from outside, you cannot do it again until next Monday.
Some other fun financial challenges include the £1 challenge, where you save a pound a day for the whole year. In the 52-week challenge, you begin by saving £1 in week 1, £2 in week 2, £3 in week 3, and ultimately in week 52, you set aside £52. By the end of it, you will have saved £1,378.
You can get creative with savings, making it fun and even asking a friend to join, helping you stay motivated and accountable.
In Conclusion…
Budgeting can feel overwhelming, especially when you have a difficult relationship with finances. However, if you spend money to mask a mental health condition like stress or depression, we suggest reaching out to a therapist like Mark Greenaway Robbins or Dr Sonney Gullu-McPhee for help.
Spending money can feel easy; however, with the right discipline, planning and budgeting, you can control the urges. Debt can be beneficial when used properly, for instance, to buy a car or home, or fund your education or pay for an emergency.
Spend wisely, it can be the difference between retiring in peace or working until the very end of life.
