Fintellity Features: Spending Tactics

What is a habit?

A habit is a repeated behaviour which could be an action or lifestyle choice that happens regularly. From this we can see that there are good habits and bad habits which can impact our daily lives. In this blog we will look at spending habits and how to form new regular behaviour patterns to help us improve our finances during this post pandemic inflation and cost-of-living crisis.

How are habits formed?

We’ve all heard that saying “its takes 21 days to create a new habit” so let’s dig into where it came from and how it can help us with our spending. The theory originally came from Dr Maxwell Maltz a plastic surgeon who believed that it took patients: “…a minimum of about 21 days for an old mental image to dissolve and a new one to jell.”

Everyone is different and for some people it may take less than 21 days and for others, it may take more than 21 days. Either way, the key here is that building a habit creates automatic behaviour that you can stick to long term to improve your life.

Once you make the commitment to start a new habit/routine and get into the swing of doing it regularly, you start to see the benefits and feel like you are accomplishing something which creates more motivation to keep going. Before you know it, the habit is something you crave and over a year or two, it becomes part of your identity.


What is a spending habit?

The way you spend money is likely to be based on a pattern and set of conditions that you don’t even realise you are fulfilling each time. We are products of our environment and likely to have picked up spending habits from our family and friends over the years. The family home growing up being especially significant in your relationship with money and how you spend, save and invest. On top of this we have our culture, businesses, the media and celebrities trying to influence our behaviours to spend more money.

Examples of spending habits

  • You buy daily hot drinks from your favourite café
  • You take the car to be washed once a week
  • You order a takeaway every Friday
  • You buy a new outfit every payday
  • You upgrade your phone once a year
  • You shop in the Black Friday sales
  • You book mid-week flights for holidays
  • You change your car every three years

Understand your spending habits

In order to make changes and improve your finances, the key is to understand what your spending habits are and why you have those conditions in place when you spend. Start by looking at your most recent bank statements and scrutinising each transaction. Remind yourself and question what the payment was for and why it was required. As you start to see the patterns of behaviour, write down a list of your spending habits. Once you have the list of your current spending habits you can see what is holding you back from financial freedom. The big step forward is making the decision to create a new set of conditions and routines which will become your new habits.

Steps to create new spending habits

  1. Make a list of all your fixed and essential outgoings
  2. Deduct your total outgoings from your income to calculate your disposable
  3. Using your disposable, put 10% into savings and 10% into an emergency fund
  4. Make a plan and list everything that requires money for the month ahead
  5. Set a budget for each item in the plan
  6. Stick to the budget

Generate habits that save costs

  • Work out your hourly wage and compare it the cost of non-essential items to question whether you think it’s worth the labour required to earn it
  • Defer impulse buys by waiting 7 days to see if you still want or need it
  • Embrace voucher codes, discount codes and coupons
  • Do price comparisons for products and services

Food saving tips

  • Order groceries online for collection or delivery to avoid temptations in store
  • Purchase store brands instead of household names
  • Batch cook meals and freeze for a later date
  • Take packed lunch to work
  • Reduce the number of times you eat out each month
  • Swap takeaways with cheaper supermarket meal deals

Household saving tips

  • Review your energy usage at home – lights, heating and air conditioning
  • Review car usage and number of vehicles in your home

Lifestyle saving tips

  • Buy clothes outside of season to get discounted rates
  • When hosting friends and family ask guests to bring a dish
  • Try Secret Santa at Christmas with friends and family members
  • Look for free days out for children during school holidays

Stayed tuned for our mini series as we cover these related topics:

  • Downsizing
  • Side hustles
  • Savvy business hacks

There are lots of money saving tips available online. Take a look and see how many you can implement to help you become more saving savvy!

We look forward to hearing any feedback or receiving suggestions.

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Shardai Cosgrove

CEO and Fintellity Co-Founder

A financially savvy, bargain hunter and budgeter who also has over 10 years experience working for multiple FCA regulated payment institutions, specialising in high-risk sectors across Europe and the US.