If it’s any consolation, Kyle, you’re not alone: I frequently get asked this question. Don’t beat yourself up about it – this is a really shit time, and there’s no rulebook on how to cope with it. If you’re splashing out more than you normally would, that’s understandable.
Having said that, it takes guts to recognise when your spending has become problematic. I hope I can help!
A cashless world is a convenient and possibly more hygienic one – and that’s not nothing when we’re having to live with Covid-19. But it also begs the question: do we really understand what digital money is worth?
I’ve got 6 practical ideas and inspiration that may help you stay in control of your digital finances, Kyle, and hopefully will help you understand what they are really worth. After all, you work hard for your money – so your money should work hard for you.
- Consider the jar method. Keeping all your money in one bank account can be a hostage to fortune. If it’s all available to spend on your debit card, the temptation may prove too great. Some people use multiple prepaid cards – or ‘jars’ – for different spending categories in their life to help them compartmentalise. But a simpler approach would be to transfer your discretionary spending funds into a different bank account and only use the card linked to that account out when you’re shopping either online or “in real life” (whenever that comes back!)
- Set digital boundaries. Online shopping is a godsend in lockdown or other restrictive social conditions, but it also raises the risk that you’ll overspend. Take regular breaks from your screens to improve your financial and overall wellbeing. Studies show that it’s far better to remove the sources of temptation altogether from your environment than try to use your willpower. So much like you wouldn’t have lots of sugary and fatty snacks in the house if you were on a health kick, you need to delete those shopping apps and unfollow alluring brands or influencers on social media. Allocate times for online spending and hunt down the items you know will be worthwhile to you, rather than reacting to what advertising or shopping websites suggest. Don’t forget to shop around and check if you’re eligible for discounts or cashback.
- I find it helpful to have a shopping notebook. Everytime I see or think of something I want (and need), I write it down in the notebook – you can use notes on your phone. I then schedule time to look up these options, see if I can find a better deal or ask myself if I still really want or need those items. Often, that delay between writing the item down and researching it can make me think twice.
- Pay your future self first. Whether you’re an employee or freelance, you have to make sure your savings are regularly topped in case of emergencies. A good way to avoid neglecting your future self is to divert a percentage of your monthly salary or latest payment into a savings account immediately. Putting more money into your savings is a real statement of intent and puts some helpful friction back in your finances. You can withdraw the money whenever you like if it’s in an easy access account, but you may only do so for things that are really worthwhile.
- Figure out the REAL cost of your spending. If you didn’t have access to credit, how many hours would you need to work to pay for something, based in your current earnings? Keep this equation in your mind, on a post-it note near your computer or as a reminder on your phone, to put your spending in perspective. If something would in real terms cost you a whole day’s worth of work, you need to be sure it’s worth it.
- Practice gratitude. We can dramatically improve our wellbeing and make our spending go further by making the most of what we have. Think about the objects you frequently use or the clothes you wear. Remember what they cost you and how many hours you worked to buy them. Get into the mental habit of appreciating and enjoying what you’ve got more, rather than chasing the high of buying new stuff you will quickly take for granted.