Imagine you were being paid £1million a month. That’s the dream, right? But if you come to the end of the month having spent the full £1million, then your finances probably aren’t in a good balance. Even if you’re being paid a salary this large, it’s still a good idea to put some money aside for a rainy day or emergencies.
So, whether you’re bringing home £1,000 or £1million a month, there are lifestyle changes you can make to help you keep more of your money.
Compare prices
This one probably makes sense without too much explanation, but the simple act of checking that you’re paying a good price for something could help to save you money in the long run. A good example of this is your gas and electricity as if your tariff expires you may be put onto a rolling contract with significantly higher rates. Similarly, checking that you’re getting a good price for your insurance each year can help to keep costs down.
Buy quality where it matters
Getting the lowest possible price isn’t always the best approach. For example, buying a cheap pair of shoes that will wear out in a few months for £15 is a worse investment than buying a more expensive pair of shoes for £60 that could last for several years. This doesn’t necessarily mean that more expensive means better, as it will depend on the price difference and the length of use to understand if it’s the better option.
Don’t go to the shops hungry
Shopping on an empty stomach might be worse for you than you may think. Five different studies found that not only are you more likely to impulse buy food but being hungry leads to increased purchases of other items as well[1]. So, whether you’re doing the grocery shop or looking to buy new clothes, having something to eat before you go could stop you from spending that extra cash.
Make a budget
We often recommend having a budget, so this shouldn’t come as a surprise. Budgeting your money gives you a better idea of where you are financially each month, you’ll know what you have to spend, what you should save, and ultimately it could help you balance out your finances. This doesn’t have to be complicated, and you could start just by keeping track of what you’re spending - you might just find a few surprises!
Automate your finances
Some things are easier when you don’t think about them - like saving money. Instead of trying to actively make saving something that you do, why not set up a direct debit that pays into your savings or investment account? This way, you can gradually build up your savings without having to think about it at all. Plus, if you save the money as soon as you get paid, then you won’t have it to miss. Win-win!
Make money a topic of conversation
A lot of couples fight over money, but if you make it a topic of conversation, then you could improve the way that both of you deal with finances. You could share financial goals, pool your resources, and even do things to make dealing with money fun instead of stressful.
Eat less meat
Reducing your meat consumption is something a lot of people may not consider, but the health, economic, and environmental benefits are huge. If you’re an ethical investor, then the economic benefit of reducing meat intake may interest you. If everyone in the world followed diet recommendations, then the environmental benefit alone could be worth £234.1 billion[2].
Drive less
Cars are great, but fuel, insurance, and servicing can all be expensive. If you’re in a position to, then driving less and relying on public transport, cycling, or walking could help to reduce your regular costs. You may even find that you could manage without a car, which could save you around £160 a month[3].
Sell your stuff
Over time it’s not unusual to find that you’ve built up a horde of stuff, whether that’s clothes, DVDs, or even scatter pillows. While your first instinct may be to throw it away or take it to a charity shop, why not consider selling it instead? With so many websites dedicated to selling used items online, you could get a pretty penny for something you may otherwise put in the trash.
Start cooking
If you don’t already cook from scratch, then you may be surprised by just how much money you could save doing this. Not only is it cheaper than eating out, but it can often be more affordable than ready-cooked or frozen meals. Planning your meals and doing one big shop a week could also help to keep to your budget and avoid spontaneous purchases.
Hide your credit card
This is a bit of a weird one, especially coming from a digital investment service, but studies have shown that you’re more likely to spend money using cards than cash. And this is amplified by credit cards[4]. The theory behind this is that there’s a delay between spending money and the amount being deducted. So, if your credit card already provides a notification when you spend, this may not help you, but if you’re shocked by your bill each month, then this could be a potential solution.
It won’t happen overnight
It’s important to remember that making lifestyle changes is never an instant success. Even if you commit to something like saving £100 each month, you’ll need to start it off and then keep at it month after month. Automating this process may take the thought out of it, but each month you’ll have to go without spending that £100 – and there will be plenty of times where you’re tempted to buy something nice for yourself instead. It doesn’t matter what changes you make to your lifestyle, if you don’t follow through with them for the long run, then you may find it hard to continue saving money.
References:
1: https://www.forbes.com/sites/kateashford/2015/02/25/shopping-hungry/
3: https://www.thecarexpert.co.uk/average-car-costs-more-than-160-per-month-to-run/
4: https://www.bbc.com/future/article/20191204-does-e-money-make-you-spend-more
Please remember the value of your investments can go down as well as up, and you could get back less than invested.
