Many of us try to shed a few pounds before we head off on our summer holidays, but how about trying to keep some of them (at least in your wallet) with a money diet?
Getting into financial shape doesn’t have to be painful, and it could help take the pressure off your purse over the summer, especially given so many living expenses have risen recently.
Whether you’re planning your summer holiday or just gearing up for the six weeks when your children or grandchildren will be off school or university, the next couple of months can be an expensive time. There’s nothing guaranteed to make that holiday feeling disappear faster than the credit card bill to pay for it all. Ideally, you should save enough so you can pay for your holiday upfront, but if that’s out of the question, try making some cutbacks now to free up some cash for your summer break.
Sort out your credit cards
If you already owe money on your credit cards make sure you’re paying the debt off as efficiently as you can.
You may want to consider switching to a 0% balance transfer deal, although you’ll need to act quickly as rising interest rates mean that many of the best deals are disappearing fast. Don’t switch to a 0% deal if you’re the kind of person who will just run up debts on another credit card. Aim to clear your debt before the 0% deal runs out. Credit card companies are being picky so you’ll need a fairly good credit score to be accepted.
When repaying credit card and other debts, always make sure you pay off the most expensive debt first. If you’re not able to switch to a 0% deal (and with almost 50% of credit card applications being rejected last year, many people won’t qualify), make sure you use your cash to repay your debt effectively.
Cut excess spending
If you’re the kind of person who finds it hard to resist impulse buys, make life a little tougher!
Start by imposing a 48-hour cooling off period on luxuries, so if you spot something you really want, resist the urge to buy it for 48 hours, and then think again about whether you need it or not. We’re not suggesting you use this strategy for the staples you need to buy, but if you end up treating yourself on a regular basis when you can’t really afford it, it’s worth considering.
It’s also a good idea to leave your credit cards at home if you’re going anywhere you could be tempted to splurge. If you don’t have the money with you, you can’t spend it. Take out enough cash to last you all week and only take what you need with you.
There is of course a chance that you might need some money for a genuine emergency. In that case, take a debit or credit card with you but make it harder to spend with it. Stick a post-it note on the card saying ‘don’t use me if you want a stress-free holiday’ or something else that will remind you of why you’re trying to spend less.
Always check your bank and credit card statements – carefully. Make sure you’re not paying for anything you no longer use or need or that there are no mistakes.
Keep a spending diary
If you genuinely can’t work out where your money goes each day, keep a spending diary and write down what you spend it on. It sounds a tad dull but it can be a really effective way of finding out exactly why your cash slips through your fingers.
You should keep a spending diary for at least a month for it to be effective and if you can keep it for three months, so much the better.
Save on eating out
Many people spend a lot on eating out each month. If you’re the kind of person who eats out more than they can afford – cut down, and eat in your kitchen (or garden) more/ It’s an easy way to save money. Add up how much you spend on eating out each month and work out what you could use that money for.
If you eat at home but live on ready meals, try and cook from scratch. In the summer you don’t really have to cook much at all as you can eat healthy salads instead. We’ve got lots of recipes that might inspire you in our Food and Drink section. You can find out other ways to keep your food costs down in our guide 21 ways to save money on your food bills.
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