So, here we are again. Lattes. With recent research by McDonalds claiming that millennials are spending an average of £728 per year on takeaway coffee, the debate rages on about whether or not this is the reason that none of us can afford a house (it’s not).
Generational outrage and the housing crisis aside, there is a good reason to audit your financial habits every now and again. As human beings, we love a dramatic change or grand gesture, but the truth is that the majority of our lives are actually shaped by the tiny things that we do every day – meaning that those little indiscretions that we commit without even thinking can end up having an impact that is much bigger than the sum of their parts. In our financial lives particularly, our bad habits can compound over the years to create an untenable situation.
The silver lining to this is that even small tweaks to your spending and money-management behaviour can give you a significant bounce back in the right direction – but first, you need to identify what they are. Here are a few common money-sapping habits, and what you can do to avoid them.
Takeaway coffee (and other things)
I know, I know. It’s not all down to the frappucinos. However, if you’re concerned that your hard-earned money is disappearing without you having much to show for it, it’s not a terrible idea to look towards convenience food and drink as a means of mindless spending. A weekly takeaway could cost Brits in excess of £1,200 per year which, in addition to that £728 figure for coffee, is really starting to add up. As companies like Deliveroo and Just Eat have made ordering in easier and more desirable, it’s not hard to see how a takeaway habit could creep into the lives of busy, burnt-out people.
The solution to this seems obvious, but meal prepping and taking coffee from home can be quite hard to actually implement when all of our reserves of time and energy are already spoken for. A good compromise, especially if you’re overspending on sustenance just for reasons of convenience and decision fatigue, could be to keep a few ready-made or super easy options in your cupboards or freezer for days when you just can’t face cooking.
Impulse shopping
In 2024, rampant consumerism has become so normalised that most of our thresholds for what constitutes a ‘must-have’ have been dramatically lower. Every moment of our lives, there is an opportunity to shop, and marketers are constantly thinking up cleverer and cleverer ways to get us to part with our cash. The fact that payment is so seamless – one click or tap is often all it takes – means that we’re no longer forced to take the time to think about what we’re about to buy. Last month, I found myself ordering a Hello Kitty iced coffee cup because it was one of the ‘last few remaining’ – I don’t particularly like Hello Kitty, I’m not a habitual iced coffee drinker, and it doesn’t fit in the cup-holder of my car, but in that moment, I felt that I desperately needed to possess it.
Impulses can be very strong, irresistible even, so rather than attempting to ignore the drive to purchase something, I find that honouring the desire in a different way can be effective. Add it to a “want list” or promise yourself you’ll buy it “some day”, and often you’ll find that you completely forget about it within a matter of hours.
Avoiding your bank balance
Aside from the anxiety that it causes, financial FOFO (fear of finding out) can actually make your money situation materially worse. If you don’t check your bank balance regularly, you’re more likely to receive charges for things like failed or late payments, overdraft use and going over your credit card limit, and all of those little fees and penalties can add up to a lot.
This is a fairly simple solve: get your balance sent to you each morning. Most banks will send you free text alerts if you opt in, or you can use a budgeting app like Snoop or Emma and get push notifications summarising the balances of all of your accounts to keep things even more streamlined.
Yo-yo saving
Yo-yo saving – the practice of transferring an optimistic amount of money into savings at the beginning of each month and then steadily withdrawing it all as you run out of funds – is something that a lot of people do, but most feel quite ashamed about. It’s a very common habit, and it comes from that eternal symptom of the human condition: creating rules and restrictions without remembering that we are the ones who are actually going to have to stick to them. The issue is that this habit doesn’t allow any savings pot to actually grow or benefit from interest or returns, and it also undermines your financial confidence, because it can feel like you are constantly failing with money.
The only way around this habit is to drastically dial back what you’re saving while you work out what you’re overspending on, and what you can actually afford to put away. Even if you start small, you can build up the amount you save as you either earn more or cut down on expenses. Outsourcing your saving habits to an autosaving app like Chip or Plum can also be really helpful.
Mismanaging your subscriptions
Probably one of the most devious money drains of 2024 is the unchecked subscription. Whether you’ve signed up for a free trial that you’ve forgotten to cancel or set up automatic deliveries of household sundries only to end up with a glut of dishwasher tablets and tampons, all of those small amounts can add up to a huge overspend by the end of the month.
To salvage some of that wasted cash – and possibly cupboard space – put a reminder in your calendar to audit your subscriptions once per month. This shouldn’t take more than 20 minutes or so, but will allow you to catch any unwanted money leaks. Another tip for you here – don’t subscribe to anything that allows you to sign up online, but requires a phone call or email to cancel – any barrier to cancellation will result in at least a couple of months of kicking yourself when you see the fee leave your account.
Forgetting to collect (or use) loyalty points
Gone are the days when collecting loyalty points required you to carry around a wallet fat with plastic cards – now, most of the time all you need is a quick tap of your phone to cash in on your relationship with a particular brand. Take a few minutes to add all of your loyalty cards to whatever digital wallet you use, and then you just need to remember to tap before you pay – you could even get price advantages for things like Nectar, which will save you even more.
The other side of this coin is remember to keep track of your points, and actually spend them before they expire. A great approach to this is to save up your points for a specific event, such as Christmas, and cash out or spend them at the same time every year.
Letting contracts auto-renew
Auto-renewing your contracts, from car insurance to broadband, is one of the surest ways to waste money. Keeping on top of your life admin, and taking some time to shop around when those auto-renewal emails come in, can help you to make sure that you’re getting the best deal for your current needs.
If this is a bit much for your mental load, you can use an app like Snoop to spot upcoming auto-renewals and search for better deals automatically, freeing up a bit of cognitive space for you.
It’s easy to let expensive little habits creep in, but there are measures we can put in place to boot them out again and reclaim some of that cash. And about the coffees – if you love them, keep them. If you’re just buying them out of habit, maybe that £728 per year could be better used elsewhere.
Clare Seal is the creator of the @myfrugalyear Instagram account, and author of Real Life Money
