The best thing about personal finance is that it’s individual to you, and you have complete control over it. However, in the face of a consumerist onslaught, keeping your spending and expenses in check can become difficult. While it’s possible to get a small personal loan for emergencies, it’s also important to revisit your spending.
So, where are you spending your hard-earned money?
Often, it’s tied up in everyday spending, things automatically debited from your account or labelled as “normal” expenses that you may not even need. These overlooked costs can quietly eat into your budget and derail your savings goals.
To help you take back control, here’s a breakdown of common expenses people often overspend on and how cutting back on just a few of them can help you save more, stay afloat during tough times, and build a healthy emergency fund for the future.
1. Coffee
That daily coffee might not seem like a big deal. Whether it’s from a local café, Starbucks, or a fast-food chain, it usually costs around £3.73 or more, depending on the location, outlet, and any extras you add.
It’s easy to justify with a casual “Let’s catch up over coffee” or by grabbing one on the way to or from work. But while it feels like a small treat, the costs add up quickly. One cup a day could set you back £1,362 a year.
As an alternative, make your coffee at home and carry it in a reusable flask or sipper. It’s just as satisfying, far more affordable, and better for both your wallet and the environment.
2. Unused Subscriptions
Subscriptions are everything nowadays, from entertainment to gyms to even food delivery. But if you look closely, you’re probably not using half of them. Maybe you signed up to watch a specific show and forgot to cancel, and now you’re paying £5.99 a month for something you barely touch.
The same goes for that gym membership you bought in a burst of New Year motivation. If you haven’t been in months, it’s time to reconsider. Simple lifestyle changes like taking the stairs, walking instead of using the lift, or choosing to walk short distances rather than taking an Uber or the tube can be healthier and free.
And when it comes to streaming platforms, consider sharing accounts with friends, roommates, or family. Most services allow multiple users, so you can still enjoy your favourite shows while cutting back on unnecessary spending.
3. Credit Card Interests
Yes, you probably consider it a necessary expense, but it’s not. Hear us out. Credit cards are extremely beneficial; you can use them judiciously to build a positive credit score while getting benefits like cashbacks, rewards or points that can be redeemed for flight tickets or other things.
However, there is one drawback – if you don’t pay your credit card dues by the due date, you pay interest and fines. Credit card interest rates are steep, and even just paying the minimum amount will make it difficult to get out of the debt cycle.
Keep your credit card spending to a minimum and work on paying it off entirely each month, and save some extra money for your retirement fund.
4. Fast Fashion
You might think you’ve made a bargain buying clothes, shoes or winter wear for a steal. However, these are often low-quality clothes that may not last as long, resulting in a low return on investment. It’s a good practice to invest in good-quality clothing that lasts long, is sustainably made and is good for your body.
We often feel the need to buy matching makeup and accessories for every attire. Did you know that by mixing two colours of lipstick, you find a new shade? Or investing in basics like black, beige or white purses and shoes can help you mix and match with different clothes. Being smart with styling choices allows you to be fashion-forward without buying unnecessary things.
5. Alcohol
Does your weekend plan include pub crawling? The average pint of beer in the UK costs £5.44. However, when you buy in bulk, it can be less expensive. Pubs and restaurants often charge extra for their services and taxes. All this can be saved when you bring the party home.
Plan a date night at home, cook food, decorate the living room and stream a movie while raising a toast. It’s pocket-friendly, intimate and relaxing. If you want to indulge, you can also get wine or other tipples of your choice.
In Summary…
Having a budget will allow you to check the overheads you are spending and modify them accordingly. Small changes in our spending habits can make a big difference to our bottom line. Budgetary review is a good personal finance habit that helps you keep a tab on your spending while making modifications to meet your short and long-term financial goals.
Being savvy with your money is required to stay ahead of the curve, especially in the current financial climate, where things are costlier than they were half a decade back.
What are you cutting back on to save money?