Resolutions | Stop Wasting Money and Get Smart

You’d be surprised how much money we waste every year. Research shows that, on average, people squander nearly £3000 on non-essential items that do nothing but burn holes in our bank accounts.

What must happen is that we start getting smart about where our money is going. Every generation has wasted money in the past; it is just a natural thing that comes with the slightest hint of financial independence. Not focusing on where the money is going and using poor budgeting skills has the potential to leave you in the lurch, should something unexpected occur.

So what are the areas where you can start thinking a little harder about saving money? You might be surprised that it is pretty much everything. While there’s no need to go all-in on frugality, being more sensible with your spending can open up opportunities for you to do and buy whatever you want.

If you love gaming, a little bit saved here and there will help you buy a new console; if you love to travel, then putting the pennies aside each week will allow you to save up for your dream globetrotting odyssey.

FOOD

Food, glorious food. We spend a lot of money on food that will inevitably go to waste. There are many reasons for this, such as poor preparation, forgetting about it, or merely laziness; it’s always much easier to order in (or eat out) than it is to prepare some culinary masterpiece, especially when you are just not feeling it.

But we waste so much food every year. In the UK, this is estimated at £13 billion altogether. This applies to households but also supermarkets, which elect to throw out expired or close-to-expired produce. Countries such as France have recently passed a law to ban supermarkets throwing food that is still viable and instead encourage them to donate the food to the homeless.

But it’s not just household waste, spending money on takeaways or eating out also burns holes in the wallet. And, as much as these places claim to provide healthy options, the healthiest option - for both body and bank account - is to eat in, despite how tiresome it can sometimes be.

DEBT AND INTEREST

Sometimes, you don’t have the money in your bank account to buy something that you either desperately want or legitimately need, like a new appliance following a breakdown, or a purchase that arises just before payday. In times like these, people often choose to put these items on their credit card, with the intention of paying it off once they get their bill.

But this can frequently snowball, and you become so reliant on your credit card that it becomes a bit of a commerce spree. However, being frivolous with these payments and not staying on top of them leads to interest rates, where you are spending even more even though you are not buying anything. Furthermore, failing to pay off credit card debt promptly causes problems for your credit score, which can interfere with any substantial purchases - like a car or home - in the future.

CLOTHES

Everyone loves the feeling of buying new clothes. People enjoy going out, trying new things, reinventing their wardrobe but despite the plethora of options hung inside the wardrobe how often do people look and think ‘I have nothing to wear!’

Obsessing over the latest trends, following designer labels religiously, or merely buying a new outfit that you will wear once or twice and then forget about, is doing your bank account no favours.

Furthermore, on the other end of the scale, people worry about spending too much and end up buying things such as the same shoes three times a year because they are poor quality. There is an old saying that the rich are rich because they spend less money. It seems obvious, but these rich people will spend lots of money on their clothes, but these clothes will last a lifetime, instead of updating them every six months due to wear and tear.

Also, doing high-street shopping, where prices are inflated due to demand, causes similar problems for your bank account. Opting to explore second-hand and vintage shops will allow you to find bargains and most of the time, they will be unique to you.

GADGETS AND ELECTRONICS

A lot of us always want to get the newest gadgets and electronics. A new phone, a new TV, a new games console, and more are all places where we throw money away because of this desperate need to have the latest tech on the market.

Typically, this occurs when a new model or version is released, but that can often be just out of beta and so is still riddled with bugs. Often, consumers are unhappy with the product and wish they hadn’t bothered.

Furthermore, if you work in an office or do a lot of printing, then ink cartridges, a product that is said to be more expensive than gold, is costing you or your business a fortune. Instead, consider researching cheap printer cartridges as opposed to buying directly from the manufacturer, and save your money on this bizarre luxury item.

DRINK

Raise your hand if you nip into Starbucks or Costa every morning before work for your coffee. Yeah, thought so. These little treats you give yourself are expensive though. While it may not seem like much at the time, it soon adds up.

Instead of visiting these coffee shops, consider investing in a thermos and a coffee machine which allows you to make similar-standard coffee for a fraction of the price. Additionally, bottled water, a beer or two after work, and fizzy drinks are all areas where people spend too much. Consider carrying your own water bottle around with you to fill up at work, and cutting out drinks that contain too much sugar. Soon, you won’t even be thinking about them, as long as you have your water.

IMPULSE

Impulse buys are the type of purchases you do when not expecting to buy anything, but are so enamoured by the product (or the marketing), that you feel you must have this thing now! We are all guilty of impulse buys at some point in our lives, and often the reality of taking it home and out the box sometimes leaves us with a sense of buyers’ remorse.

Curbing these impulses will save you a whole load of money in the long run. Typically, these buys are on the higher end of the expensive scale. They are purchases that we think ‘Well, I’ve got the money for it, so why not?’ And so you grab it, take it to the counter and then perhaps a week later or so, you look at your bank account and wonder where all the money went. You may have even forgotten you bought anything in the first place.

BAD HABITS

Whether it be smoking or drinking or anything else that could be considered a bad habit (and, really, indulging in anything to the point of excess could be considered bad), you are doing nothing more than wasting money. The idea of addiction runs parallel with a sense of security. You may not consider yourself to have an addiction, like smoking two packs a day, but the positive feelings associated with things like smoking in times of stress can lead towards a slippery slope.

Furthermore, these bad habits will not only negatively affect your bank account but your health, also. Therefore, it is essential that cutting down - if not entirely quitting - these habits will benefit you in more than one way in the future.

BILLS

Bills are the bane of our lives, but still a necessary evil. We want all the hot water and heat and electricity we can, but that sort of luxury costs money, and so if we want to maintain our comfortable lifestyle, then we are going to have to pay bills. But there are still places in which we can save money on our heating and water bills, even if it means a slight discomfort for an hour or two.

Electing to take cold showers saves money on hot water, wrapping up warm, instead of whacking the heating on, will save money on energy bills. Furthermore, phone bills that provide you with everything for some extortionate price aren’t always necessary. If you can figure out exactly how much data or call-time you need and find a suitable plan that will provide you with this, then you will save a lot of money in the long run.

GET SMART

If you are used to a particular type of frivolous lifestyle, then it can be a difficult transition at first to change your spending habits. This sort of thing is all about discipline, and so as long as you focus on your spending goals, and avoid any temptation to splurge your savings on something you may later regret, then you will soon be reaping the rewards.

Smart spending is essential if you want to feel even more secure in your finances. Once you have got this under control, then you will have developed a nice little buffer of cash, allowing you to spend money on what you really want to do.