Buy Now Pay Later; that enticing checkout service that allows you to have your stuff ASAP but pay for it later. For those who “wanna cop some new gear but can’t wait until payday”, as JD Sports puts it. It's the financial equivalent of having your cake and eating it, right? Well not quite. Whilst these increasingly popular services can be useful for some, they can also be an unhelpful gateway into overspending and problem debt. Not so good. But what’s the alternative?
Even if you've decided it's time to give up Buy Now Pay Later for good, you still want stuff! So, here's 5 steps to make that wish list a reality.
1. Identify spending pitfalls
Saving and spending go hand in hand, so you can't get serious about saving before you figure out where your money is going. Look through your bank statements and identify where you might be falling short. It can be painful to get honest, but this isn't about beating yourself up. Remember, we've all made regrettable purchases (neon pink tank top you’ve never worn, anyone?) but shaming yourself won't bring the money back.
2. Make a budget
I know, it's not fun or sexy, but budgeting is one of the most powerful tools in your arsenal for gaining financial freedom. Think of yourself as the CEO of your own small company. To run it well, you wouldn't just look at immediate wants, you would think long-term. The adapted 50:30:20 budget will help you with this. Identifying your "needs", "wants", and "goals" will help make your spending more meaningful, ensuring you can have nice things without compromising your financial health.
3. Make it Easy
Setting up a budget is only the first step; you need to stick to it. With technology, it's never been simpler to automate and track your money. Pay yourself first: set up a standing order for payday that puts your "goals" money into a separate account that you can't touch easily. Then you can track your "needs and wants" money using your banking or budgeting app. If you want to see all your finances in one place, open banking apps are the way to go. The OpenMoney app can help you keep track of your spending, set savings and debt goals.
4. Reframe your wants
Make a list of some of the things you really want, but look at them with your CEO eye. Are they meaningful? Will they improve your life? Most importantly: can you really afford them? Take a moment to reflect and consider your priorities and remember, you do you.
5. Keep track and enjoy!
Now that you've done all that work, it's time to enjoy your hard-earned money. You set aside a percentage of your earnings for “wants” so you can enjoy the fun stuff guilt-free. That said, no one wants to pay over the odds. Save your list from step 4 to a wish list and use a price-tracking app like Google Shopping to help you choose the best time to buy. Setting up a monthly reminder to check in with your finances can help you feel confident that you’re on track. You’ve got this!
Alice Tapper is a financial campaigner. She launched the #regulateBuyNowPayLater in June which has since led to investigations by both the FCA and ASA.