According to our latest research, our worst money habits are costing the average Brit around £250 every single month. If you were to ask for an additional £250 from your employer, that’d be a pretty juicy pay rise. So, what are we spending this money on and how easy is it to claw some of it back?
We asked 2000 adults in the UK if they had any bad money habits, and if so, what they were. A whopping 60% put their metaphorical hands up and declared they were guilty of repeating the same money-wasting habit time and time again.
The top 10 bad money habits
- Paying for unused subscriptions or not cancelling free trials
- Spending on credit cards
- Not switching things like energy or insurance when I should
- Thoughtlessly using contactless payments without thinking about budget
- Not budgeting at the beginning of the month
- Not reviewing my direct debits regularly
- Expensive holidays or weekends away I can’t afford
- Gambling and betting
- Not reading bills
- Not paying into a workplace pension
Bad money habits are not only hurting pockets, but they are also affecting livelihoods and mental health. More than 65% of respondents said that their bad money habits are causing them stress, anxiety, and worries, with 35% admitting that their bad money habits are landing them into debt.
It is never too late to break a bad habit and form some new ones, so here are 5 top tips that you can try...
1. Don’t forget to switch
Although this is a turbulent time for energy bills, there are also many other things people forget to switch. Whether its car and home insurance, internet or phone contracts always look elsewhere before your contract renews. Doing this can save hundreds of pounds each year.
2. Be careful if betting and gambling
Of those surveyed, 31% stated gambling and betting as one of their worst money habits. Whilst some say that placing the odd bet can be fun and harmless, and some would argue an integral part of watching competitive sports, it is important to remember you will rarely win.
If you do decide to place a bet, stick to small amounts and ensure your essential payments such as rent, mortgage, energy bills, groceries and even your surplus spending budget (such as money for treats) are all covered first. Never bet anything that you can’t afford to lose and if you worry your gambling may be getting out of control, reach out to a gambling charity for support and help.
3. Set your budget and stick to it
Noting down exactly what your monthly outgoings are and what money you have left over, you can easily create a plan on how much you can save and spend each month.
With credit card spending so high, it shows many people are living beyond their means. And with access to other finance options like Buy Now Pay Later easier than ever, purchases are leading more and more people into debt.
Decide what big-ticket items you want to buy, whether that’s a new car, coat, or a holiday. Think about what things you really want to spend your money on, and something comes up that you want to buy but need to use a credit card or a Buy Now Pay Later scheme, think about if it made your priority list. If it didn’t, then it’s probably not worth it!
4. Pay into your workplace pension
In most cases, your employer also contributes to your workplace pension. This is basically free money – don’t turn it down! It might be tempting to not pay into a workplace pension and use the money you contribute straight away instead, but you can often change the amount you contribute so you can find something you’re comfortable with.
With a workplace pension, contributions are taken from your salary, your employer, and the government. Every month, you will contribute a percentage of your salary and your employer will match – sometimes exceed – your contribution. You also benefit from tax relief from the government on your pension contributions. For every £80 you put in, the government will give you £20, making your total contribution £100. Your employer matches this amount, meaning you’ll pay £200 into your pension.
5. Have a holistic view of all your spending
This is a pretty easy one to fix, and luckily we have just the tool that can help. Shameful product plug? You bet’cha – but this is exactly what our app is designed to help you with. Our app lets you link all of your bank accounts, so you can see all of your outgoings in one place. Your outgoings are categorised, so you can see at a glance which of your bills are subscriptions letting you quickly review which ones you want to keep, or the ones you want to stop.