Ever heard of Stoptober?
It’s the annual campaign to help people stop smoking. If you’ve given up, or never started, or are a happy vaper, great stuff. But hang on, October is a great time to kick other bad habits too – the financial ones. Are you on top of your banking? Does some of your spending make you a bit uneasy? Have you drifted into some unthinking money habits? OK, they might not be threatening your health but they can certainly chip away at your readies, put a crimp on your savings, and make you feel you are not in control of your cash. Here are five quick tips for an autumn financial health check.
Yes if you smoke you won’t need telling again that it will kill you. But how about the financial damage? Buying five packs of fags a week will make a £200 a month dent in your budget. Maybe you are saving for a house deposit, and maybe you could put that £200 into the new Lisa where the government gives you a 25% bonus? Hey presto, your reward for being virtuous is a slam dunk £15,000 after five years.
2. The coffee (tread)mill
Same principle with something that tempts most of us, most days – that handy carry-out coffee. Cutting out a daily dive (five days a week) into Costa or Caffe Nero could see you jingling a neat £50 into a coffee jar every month. That’s £600 a year. And what about those takeaway lunches and suppers that are just so-oo convenient? That could be another £100 a month where you might take a brain check – could you make your own picnic, and rustle up something easy on the stove, without being spooked by a cookery show? Kerching, your secret saving has just gone up to £1800 a year.
Yes, we love the banking revolution, where all you have to do is wave a card at a machine and whatever you fancy (up to £30) is yours, just like that. And the money drains from your account, just like that. But it can lead us to spend more than we are comfortable with or can afford, perhaps when we are shopping for clothes, or out at night. One trick is to be firm, obtain some cash (remember it?) from an ATM, set your budget for the occasion and take only the cash to cover it.
4. Freebies that cost
We’ve all been hooked in by an offer of a free trial. When you sign up, 30 days sounds like a lifetime. Of course, you tell yourself, I’ll remember to cancel, so there’s no harm in giving my bank details. Freebie alert! Companies make millions from our apathy in forgetting to cancel free trials and promo subscriptions for services that we don’t really use or want. So make time for a banking clean-up. There’s an even an app called Trim which helps you track down rogue credit card mandates and lets you ‘cancel with a click’.
5. The overdraft
If you really need it, make sure you are not paying a daily fee – that’s giving money away. You need to switch to a current account with a cheap overdraft such as First Direct, Nationwide (FlexDirect) or Starling Bank. Better still, get switched onto a budgeting app like Money Dashboard or OnTrees which will show you exactly how and where you are spending every week or month. Banks now offer their own budgeting app tools to alert you to your spending behaviour. Take the plunge, and let the digital money revolution help you save as well as spend – and it can be fun, honest!