Do your savings goals go out of the window if you get an invite for a night out or you spot an influencer recommending a “must-have” purchase on social media?
If your income can’t outrun your spending, it could be a sign of “lifestyle creep”.
Lora Rowley, a personal finance expert at Starling Bank, says: “While it’s nice to treat yourself from time to time, this can add up – but there are many things you can do to reduce this so you can save in the long run.”
Here are some tips from Rowley for tackling lifestyle creep:
1. Remember FOMO (fear of missing out) is real – and what we see on social media isn’t always the whole picture
Rowley says: “While it might look like your friends are always living their best lives, remember that no one is posting pictures of the beans on toast they’re having for lunch the next day.
“If you realise that you’re spending more when you’re with particular friends, you could suggest going to cheaper places or even doing free things like a nice walk.
“Honesty is the best policy, so if you’re trying to spend less money, let your friends know and have an open conversation. They might be looking to reduce their spending or save for a specific goal too.”
2. Understand where your money is going
A relatively simple way to check your spending habits is by looking at your spending categories in your banking app.
Rowley adds: “Similarly, check your direct debits to see if any subscriptions aren’t being used as much anymore – for example, are you getting value out of your streaming services?”
Some people may also be more inclined to treat themselves when they’ve had a gruelling day at work, for example. If you’re spending to give yourself an “lift,” it’s worth considering how your emotions affect your finances.
There may also be particular times of day when you’re more inclined to make discretionary purchases, for example if you’re scrolling through shopping websites on your phone during a commute, so you could consider changing your habits.
3. Sort spending into ‘traffic light’ categories
Rowley suggests you could consider “green” as the essentials, “yellow” being things like occasional sweet treats or meals out, and “red” being complete no-spend areas.
She adds: “If your banking app allows, it might be worth ring-fencing these amounts into separate spaces – allowing yourself to budget for small indulgences is likely to reduce your odds of splashing big cash.
“It’s also key to not be too hard on yourself. If you do slip up with your budgeting, don’t give up – see it as a chance to reset and go again the next day.”
4. Try a no-buy period
Some people may consider having a period where they don’t spend anything at all on non-essentials.
People sometimes talk about a no-buy year – and while that may seem extreme, there could be other options – perhaps a no-buy day of the week or weekend.
Rowley says the concept can sound intimidating “so an easy way to start is by making a plan – you don’t have to commit to every day being a no-buy day, so just do what works for you”.
5. Add some friction to your spending
“For example, you could un-save your card details in shops where you often shop online,” says Rowley.
Handing over physical cash rather than swiping to pay could also give you pause for thought before a purchase.
