But I can’t cut back on that, that, or that
No-one wants to be a scrooge – life’s for living after all – but if you’re sacrificing financial security for a few throwaway thrills, then even if it feels great in the short term, you’ll end up kicking yourself. Listing your outgoings lets you objectively see what’s a necessity (like rent, mortgage, debt repayment) and fripperies, like your daily coffee habit, eating out, or new additions to your wardrobe.
Don’t underestimate what even small cutbacks can achieve – ditching the daily takeaway coffee at £2.50 could add up to more than £600 a year and if you spend £5 buying your lunch every day, it could be costing you more than £1,200 a year. Turn the daily coffee and bought lunch into a weekly event – it’ll feel like a treat and be something to look forward to.
But like anything in life, if something’s too restrictive you’re going to eventually fling your arms in the air and say ‘it’s not worth it’ so the trick is to still make sure you’ve got some spends for fun stuff. As long as your financial necessities are being met, allow yourself a budget for enjoying yourself; it’ll mean you won’t pine for the good old days of reckless spending.
Try and keep a discretionary fund topped up for the odd birthday present you need to buy or for events like Christmas. If you’re trying to save money though, most people will understand not getting a Christmas card (which will only end up in recycling) or expensive gift.