Five ways to develop better spending habits

At a time of year even more focused on spending than usual, there are a few simple habits you can develop to help you keep a rein on your resources.

Prioritise saving: Move money into your savings account or ISA before you have time to spend it with a direct debit on pay day. Set a budget for spending and stick to it.

Pay in cash:  Studies have shown paying in plastic reduces the ‘pain’ of paying, because it feels less like ‘real’ money. Contactless payments can make spending even more ‘painless’. This effect has been seen in brain scans: the ‘pleasure’ regions of the brain are associated with purchases made on plastic, but both ‘pleasure’ and ‘pain’ light up for those paying in cash.

Take your time: Any delay gives you time to consider whether you really want or need that item. Simple steps, like disabling ‘one-click’ purchasing and deleting saved cards details on your computer can help. Better still, leave your wallet in another room when browsing. Even small hurdles like this can nudge us away from making a purchase. Waiting at least 24 hours – or better still a week – before purchasing also gives you time to shop around on price.

Don’t shop until you drop: Avoid hitting the shops when you’re tired, which reduces our ability to focus and make logical decisions. Long shopping trips, or hours browsing online will add to this fatigue, and undermine your willpower when it comes to making sensible purchasing decisions.

Clear out ‘cookies’: Delete these regularly to avoid being bombarded with ads for items you’ve been browsing online. These reminders can wear down the resolve of even the most careful shoppers.

Once you get into the habit, it’ll be easier to keep that New Year’s resolution to save more and spend less…

 

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