Have you ever looked at your bank account and been concerned about your “available” balance? Most of us have at some point, according to a recent survey carried out by our friends over at same day loan broker Growing Power. Cutting your spending can feel like a mammoth task that many of us would rather avoid than take responsibility and follow steps to improve our finances.
However, with a little bit of time and effort, cutting your spending can become instinct and your bank balance can start to look healthier. Even if your income isn’t great, there are ways that you can improve the way that you spend and make positive changes to your habits.
1. Destroy your credit cards
Credit cards can be a lifeline for many people and there are times where you’ll need to use them. However, many of us are guilty of having too many credit cards and generating unnecessary debt. If you have several cards, consider destroying all of them but one.
Although you may still have balances to pay off on these cards, you’ll be able to access your account and make payments towards your balance online. Cutting up your cards will avoid the temptation to use them unnecessarily and it doesn’t mean you’ll never be able to use them again.
If you feel at any point that you need those credit cards again, you can request a new card. Living within your means will allow you to have a better relationship with money and set up positive future spending habits. Stick to using your current account as much as possible and steer away from overdrafts and credit cards.
2. Transfer balances
As overdraft and interest charges are increasing in the UK, it can be a good idea to transfer any balances that you have on credit cards where possible. Banks are now competing to get customers to move their balances to them and offering good deals for doing so.
You may be paying a fair amount of interest each month on a credit card, and if you’re paying the minimum payment then it’s unlikely that you’re decreasing the balance of the card that significantly. Transferring your balance to a bank that offers 0% on balance transfers for a set period can mean that you’ll pay the same amount that you’re currently paying each month towards your balance but you’ll decrease it substantially more.
Shop around for banks that are offering balance transfer deals, although you may not be able to find a 0% deal, you may be able to find one that allows you to pay less interest than you are currently.
3. Delay purchases
In this modern age where targeted adverts are constantly following us around online and shops are getting increasingly better at visual merchandising, it can be tough to avoid impulse buying. Retailers know exactly what to do to entice us and make us spend our hard-earned cash, so always try to stay one step ahead.
The next time that you are about to make a purchase, think about whether or not it’s really necessary. If you think that it is necessary, still give yourself 24 hours before committing to the purchase, especially if it’s fairly costly.
Not only will this allow you to shop around for a better deal, but it’ll also give you time to think whether the purchase is necessary or whether you’ve fallen victim to a strong advertising campaign.
4. Get the best price
If you’ve waited 24 hours to buy something and still think it’s necessary then go ahead and make that purchase, but make sure you’re getting the best deal.
With so many retailers online now, prices can vary greatly. Never settle for the first price that you find, look around and compare different retailers before committing to one. This also means looking online for discount codes and coupons that may apply to your purchase and knock a fair chunk off the price. One good tool for this is Invisible Hand. This is a Chrome Extension that will automatically search for a better price from multiple retailers when you are about to buy, ensuring you can source the best deal without trawling through Google and multiple websites.
5. Use lists
If you’re about to go shopping, whether you’re online, in the supermarket or on the high street, make a list. It’s very easy to get distracted when shopping and this can sometimes mean you’ll end up coming home with everything other than what you went shopping for in the first place.
Creating a list that you can mark off as you go can mean that you’ll be less likely to deviate from the plan and come back with what you need rather than what has caught your eye.
6. Change payment methods
If you have online accounts with any retailers, think about changing the payment method that you have on file with them. Many of us have credit cards or debit cards with overdrafts set as our default payment method with many online retailers.
Removing these cards and only having one card on the account that is linked to your current account can avoid getting yourself into any further debt unnecessarily.