Posted by Allison on 1 April 2009, 16:22
Are you overtly generous with your money when it comes to treating yourself? Or are you struggling to think of the last time you bought anything at all for yourself, short of the essentials we all need?
There's no doubt that spending money on things we don't really need or want every day can eat into our available cash. It can also run us into debt very quickly if we aren't too careful.
But it's often the case that we don't even realise how much we are spending until we're faced with an overdraft or a credit card bill for the total amount of currency involved. Budgeting might sound boring but it does help you to understand where your money goes each day.
The website Money Matters to Me has got a great page which really illustrates this to a tee. Visit http://www.moneymatterstome.co.uk/5-Spending-and-budgeting/Sub1/WhatAmISpendingMyMoneyOn.htm and follow the step by step instructions to see just how much money you are frittering away on things that seem quite small and cheap at the time.
It's clearly not just a case of how much money you spend that can be a problem. It's what you spend it on. Sometimes we can get stuck in a rut of buying things for the feeling of excitement we get at the time. This can develop into an expensive habit, and some people don't even use the items they buy.
So if you are one of those people who do feel the need to spend, what can you do to combat the problem?
Well if you are prone to spending large amounts of money, get into the habit of leaving your cards at home. If you have to part with banknotes to get what you intend to buy, you'll think twice about doing it! It's surprising how much harder it becomes.
It can also work well to allow yourself a set amount of pocket money each week. For example you could allocate £10 or £20 a week to spend on small items such as magazines and coffees. If you eat out every lunch time, have you worked out how much you spend on them with the help of the website above? If you have, you will probably realise they can really add up.
So why not pack your own lunches and treat yourself once a week instead from your allowance? Not only will you save money as a result, you'll enjoy the lunch you buy much more as well.
Lots of people who try this method report that it actually becomes good fun. It's something of a challenge to start the week with a ten pound note in your pocket and see whether you can make it last the distance. In fact, you might even get caught in a battle to try and save as much of it as you can!
Familiarising yourself with your spending habits is the first step towards changing them. The more you understand your motivations for spending in the first place, the more likely you are to spend less in the future.
Reverting to cold hard currency can certainly change your ways faster than anything else could. So learn to leave those cards in a safe place at home and take on the challenge of the banknote instead!