How do you motivate yourself to reduce your spending

[NewLifeOrNot]

Currently considering several big life changes. Think relocating, different jobs, possibly being a SAHM for a while etc. All of the various scenarios we are considering (including just staying where we are and not changing jobs etc) involve being more careful with money. However we are not really in any debt other than student loans and mortgage. We do currently have a balance on a 0% credit card but we have more than that amount in savings so could pay it off if needed. The reason I don’t want to yet is that we are still building up an emergency fund and I like to have a decent amount of cash on hand in case of emergencies (can’t put all emergencies on a credit card). Plus we are currently earning 4.5% interest on the cash and have a plan to pay off the credit card to ensure that we don’t pay any interest.

So my question is really how do you force yourself to stay on track when there’s no immediate incentive? All our financial goals are 3-5+ years away. I’m finding it too easy to be tempted by small frivolous spends, nothing huge just the odd meal out or new lipstick or whatever. We do have a certain amount budgeted each month for these type of spends but finding myself creep over each month and then not saving quite as much as I should be really. Grateful for any tips!

I tend to transfer money into savings account on payday, and leave what I can spend for the rest of the month. Last month I worked out how much that would work out per day (after bills) and I found this helped me to not over spend. If I did a big shop, the daily amount would decrease, but I’d try not to spend for the next few days.
I have a spreadsheet that breaks down my savings for car/Christmas/birthdays/holiday. It really helps me to see what I am saving towards and I hate seeing the figures go down.
The odd meal or new lipstick, just try to do this on birthdays or celebrations so it really feels like a treat.
Goodluck!

Thanks I’m trying to do the thing of paying myself into my savings accounts on payday but I’m never able to pay in as much as I think I should. This is because we put all of our day to day spending on another credit card which is a rewards card and we pay it off in full each pay day. By my calculations the bill should be around £1300 each month (which covers all food, travel costs and fuel, any clothes, kids activities, trips out and discretionary spends) which should leave me with around £700 to save each month but it’s always more like £1700-800. Occasionally it’s actually over £2k which then means I have to dip into savings to cover it. When this happens it gives me a little kick up the bum and I’m a bit better the next month so that I can pay back our savings as I always feel guilty when this happens. However it doesn’t seem to make me feel guilty that I should be saving £700 a month but usually only save £2-300 because then I think “well at least I’ve saved something, that’s good”

maybe I need to stop using the credit card. However it does earn us about £40 every three months in vouchers. If I could just be a bit more disciplined then it wouldn’t be a problem.

I unsubscribed to all emails from online shops. And I never go shopping. And I budget for meals out etc. if you’re considering being a SAHM, please make sure you’re married, have full access to joint income and pay into a pension

Research shows that when we spend on a credit card, we spend more than if we used a debit card. Even if the balance is cleared in full each month, the psychology shifts. We don't have credit cards so every time we spend, we see our balance get closer to zero!

maybe I need to stop using the credit card. However it does earn us about £40 every three months in vouchers. If I could just be a bit more disciplined then it wouldn’t be a problem.

This is less than £14 per month, I can't imagine that makes the difference to your finances that you think it does.

We are in a similar position and I manage to save a little more but recently a few ‘emergencies’ have wiped it right down again. I agree with PP that the credit card incentive isn’t really worth what it is probably costing you. I lock away a certain amount towards savings each month, I mean it’s still accessible but psychologically I hate using it except for a genuine emergency. Have you left much in your planned budget for frivolous spends / fun? I always underestimate how much it costs to keep kids entertained over school hols and how I want a little treat here and there along the way. That’s not a crime.

I also categorise my credit card spending and have a spreadsheet for that egg £100 per week food shop, £100 petrol for the month. This means that my cc spend is also managed, as well as day to day purchases. Basically everything goes on the spreadsheet somewhere!!

Well if you don't save enough, those goals will never arrive, they'll always be 3-5 years away.

Is there any way you can increase your income, second job, freelancing work?

Have you minimised all your day to day expenses as much as possible (for example, how much do your mobile phones and entertainment subscriptions cost?). Do you have a car and is it small, cheap and efficient or large, with a big monthly payment and high running costs?

How much do you spend each month on groceries, and do you take lunch to work or buy it? Is your partner on the same page with your plan or are they overspending too?

Is there any way you can make the 'new life' less expensive so more achievable? Cheaper area, live somewhere where you won't need a car/only need one if you normally have 2?

It’s boring, but I think you should track all your expenses you’re putting on your credit card, assess if they’re necessary and what you get value from. A takeout coffee here, a new lipstick there etc…it all adds up.

@BusyCM i totally agree but I do like having the consumer protection of buying stuff with credit cards rather than debit. A lot of our purchases are online and I don’t know why but I don’t really like using a debit card for that. I do also worry about card details being stolen, if someone stole my credit card or the details then at least I could dispute it with the bank and refuse to pay it back whereas if my debit card is stolen or hacked then it’s my actual money that’s gone that I’d need to try to recover.

@curiositykilledthiscat i think this is what I might need to do to see where the extra cash is going. I think I can guess though. I just find it hard to stop myself because technically we can afford it. Also we have three young DCs one with SEN and life can be quite stressful so it’s easy to get into a “treat yourself” mentality.

@Bjorkdidit I’m generally quite good at checking comparison sites etc. so we are getting the best deals for utilities and insurances. I’m on Mat leave at the moment but my DH takes lunch to work and I’m quite good at trying to take snacks and stuff out with the kids. For example I just spent about £15 at Lidl on snacks and treats for the kids for next week which will save us a fair bit, I buy packs of juice 6 for £1.80 whereas a carton in a cafe is often £1.50-£2 just for one. However I tend to do stuff like order new make up bits or clothes for the kids and spend more than I would strictly need to. I also struggle to stick to a budget at Christmas and birthdays when I see things I know they’d like. And I have a very sweet tooth and when I’m tired I often pick up treats like cakes or chocolate on top of our weekly shop which I know we don’t really need and it all adds up.

My DH is generally fairly frugal but he’s very partial to a takeaway coffee or a beer out and because he doesn’t go mad with big spends he always says “oh it’s only a few pounds we can afford it” because he doesn’t really think about how it adds up. He likes to spend on food and drink but spends hardly anything on “stuff” whereas I don’t care as much about buying drinks out etc but I do like nice things so I suppose between us it’s a bit of a disaster 😬

This might not work when on a 'very' strict budget but I start by swapping. My desire for, say takeout coffee has decreased significantly since I've started making it at home!

Put your savings in an ISA that you cannot touch for at least a year. This should stop you raiding it to pay off any overspend and you will get tax free interest.

After payday I would only spend on treats/lipsticks etc during the middle two weekend of a month. That meant no frivolous spending on the first or pre-payday last weekend.

My mantra overall was: “I may want it but do I need it?” That covered about everything and anything I was tempted by! Not exactly fun but it worked a treat.

I ended up being able to pay chunks off my mortgage capital which shortened the term and eventually was mortgage free.

Discipline is what it takes! Discipline.

Honestly the best thing I've done is take a look in our attic. I could barely get in for stuff - boxes of decorations, camping stuff, old toys saved, random tables... I just suddenly despaired and thought what a legacy I am leaving where DC will have to wade through all of this when I can't face it myself! I've got enough things needing fixing around the house and would rather spend on doing things than creating more mess to sort through.

When I had a very tight budget, I listed all of my expenditure, down to the penny for a month and it really helped to show how so called small amounts of spending added up. I had little extra, but did give myself a small amount of 'pocket money' to buy a treat and even managed to save that over a few months, which made any purchase much more considered and treasured. Try more cash, for everyday items, as sometimes waving a card (which I am sure is the intention with a cashless society) makes it too easy to purchase something you really didn't need.

My DH is generally fairly frugal but he’s very partial to a takeaway coffee or a beer out and because he doesn’t go mad with big spends he always says “oh it’s only a few pounds we can afford it” because he doesn’t really think about how it adds up

How often does he do this?

A fiver once a week isn't a lot of money, but it's still about £250 per year.

The real issue is when he has 2 coffees every week day and 2 beers every Friday evening. Even at fairly modestly priced places, that could be 2 x 5 x 47 x £3 plus 2 x 47 x £5 = nearly £2k pa or the price of a family holiday. After a decade, you're in new car territory.

@YYURYYUCICYYUR4ME weirdly I think I would be much better if I was actually on a tighter budget. At times when I’ve actually been strapped for cash I find it quite easy to be disciplined. Alternatively when I have a very immediate short term goal I’m quite good at saving for that. I think I’m struggling because our goals are quite vague and are so far into the future and daily life with such needy children can be a bit of a grind. So really what’s the difference if I save £300 instead of £600 if it means I enjoy the day to day experiences a bit more. But then I regret it because we are on pretty good wages and I really should have more savings to show for it.

@Bjorkdidit i would estimate he buys three or four coffees a week so about £12. Then he also buys craft beer which I find a bit annoying because it’s so much more expensive than regular beer, some of the cans he gets are like £7 each 😯 I would estimate he spends maybe £60-80 a month on beer. But that is basically all he spends, I have to force him to buy himself new clothes or shoes and his only hobby is running which he spends next to nothing on. He occasionally goes out for a curry with friends but not often. So I don’t feel I can really begrudge him £120-150ish a month discretionary spends when we’re not on the bread line and he brings home £60k a year.

I actually visualise the cash next to what I fancy buying.

Yes, that's a good way of looking at it, as well as whether you're buying something at all, but also whether you're deciding whether you want the cheap thing or the expensive thing and there's no real discernable difference, or you're not sure whether the more expensive one is worth more.

Eg, do you want the £5 face cream and £45 or the £50 face cream, when you can't see why the expensive one is better, apart from some notion that it's expensive so it must be good.

If you work well on a tight budget, give yourself a tight budget!

I move £350 into a separate account & it's my guilt free spends for the month, but everything comes out of that - every coffee, any cosmetics, nights out, hairdresser every other month... Any small personal spends.

It sounds a lot but goes quickly and has made me so much more aware of my spending.
I run a wish list alongside it so I can prioritise what I want to buy rather than impulse buys.

God I'm boring, but it's how I roll.

I enjoy saving my cash and watching the total increase. Interest feels like free money.
You have three children. You should be saving to help them with their university fees and living expenses. I don’t need a goal to be able to save other than the security having money in the bank brings.
There’s a really good calculator on MSE which shows you how much you need to save per month to reach a given amount.
https://www.moneysavingexpert.com/savings/savings-calculator/

It's a mindset rather than motivation.
At the moment you're viewing money like a bucket of dry sand. As soon as you tip it out, it flows and slithers through your fingers, and soon disperses and disappears into nooks and crannies or who knows where.

Change your mindset to view money like a lump of clay. With it you can build, create, mould something. It won't go anywhere unless you pick it up, divide it and allocate it a job to do. It can be sculpted to suit your lifestyle, your goals and priorities.

Specifying a purpose for every ounce of clay you own means you always know where it's going and what it is doing and why. It means you can keep aside an excess supply for when times are tricky.
Doing this ahead of time before it's delivered to you enables you to manifest your own priorities.

In monetary terms, this means establishing a detailed set budget for every payday ahead of time, and sticking to it - then you develop control of where the money goes, and are not trying to figure out where it's disappeared to.
Everything else follows on from this principle.

Have you heard of the app YNAB (you need a budget). I've just finished up a free trial and ended up getting out of my overdraft and on the straight and narrow within a month.
It forces you to work on an envelope system where you can only spend the money allocated in the envelope (or borrow from another category ) and you can only budget what's actually in your account. It works with credit cards as well (so when you spend on that and tell the app it will move money to the cc pay off category so you always have the right money to pay it off.

They do a free trial and I've loved it so far. It may really help you be more intentional with your spending x

This is an excellent analogy. I agree it’s a mindset.