Ten things to consider before spending

by Leeds Building Society

Ten things to consider before spending

Every day we’re surrounded by temptation. There are a million ways to spend your hard-earned cash, from expensive lunches and drinks with friends, to designer clothes and indulgent gifts. While the little luxuries are a lovely treat, sometimes we need to limit our spending to stay in control of our finances.

Here are a few ideas to help you avoid overspending and take control of your finances.

1. Look at the big picture

Take a step back and look at your income and outgoings in an honest way. Use your bank statements to see where your money is going and where you could curb your spending. Remember, money coming in should always exceed money going out.

2. Start tracking

Most people know deep down which items they overspend on, but do they know by how much? If you spend just £5 a day on lunch at work, that adds up to £25 a week, or £100 a month, which means £1200 a year – tracking your spending makes it clear how the outgoings accumulate.

3. Focus on what you really need

Ask yourself before making a purchase ‘Do I really need this?’ Be brutal. Do you absolutely need a new winter coat or is the one you already have perfectly serviceable? You may be surprised at how satisfying it is to say ‘No, I’ll go without this time.’

4. Budget, budget, budget

Learn to compartmentalise spending. Calculate regular monthly outgoings (utilities, TV/ broadband, transport, servicing loans etc.), work out how much to set aside for food and clothes. You can then use what’s left for treats, leisure and savings.

5. Start an emergency fund

The boiler breaks, the car fails its MOT or you get a speeding ticket - when you need cash fast, an emergency fund will mean you don’t have to break your carefully controlled budget.

6. Make small changes

It’s true that small changes add up to a big difference. Try skipping your expensive morning coffee, taking a packed lunch to work and saving on petrol by doing short journeys on foot. In a few weeks, you could be surprised by the savings.

7. Become a regular saver

Once you've started to save regularly you'll gain a sense of satisfaction watching your nest egg grow. This can be great motivation to help you to resist unnecessary spending.

8. Use cash

Using cash instead of your debit card can be a great way to focus on how much you’re really spending. Why not try taking the cash you’ll need for the week on Monday and challenging yourself not to use your card again for the full week?

9. Boost your income

A second job is a big commitment but there are other ways to make a small boost in your income that can make a difference. Selling clothes or other items online, taking part in a car boot sale or turn a crafty hobby, such as card-making, into a modest income stream.

10. Enjoy being in control

Once you’ve taken control of your finances, you’ll find a new confidence and hopefully feel more prepared to make saving-friendly financial choices.

This guide is intended as a summary only and does not constitute legal advice given by Leeds Building Society. No reliance should be placed on this guide and you must make your own decisions, we recommend that you seek legal and/or financial advice if you have any questions or queries.

§ Tax-free means that interest payable is exempt from income tax. Cash ISAs are available to individuals aged 16 and over who are resident in the UK for tax purposes.