I realised something startling during the Christmas period 2018. I’m earning the most money I’ve ever earned in my life yet I still felt strapped for cash, like I was living paycheque to paycheque and anxious about money.
The reason behind this I believe is lifestyle creep. I’ve written about it before here but the gist is that as your salary increases, so does your spending to match it. I thought by being aware of this I would be immune to it, alas I am but human!
Along with lifestyle creep there is another phenomena know as the Diderot Effect. Simply put, the act of buying one thing leads to making further purchases. For example, you buy a new phone, then you feel the need for a new case, a screen protector and then insurance to protect the whole thing. This Christmas we bought a real tree, then we needed a stand to keep it watered, then a star, then lights, then decorations… what began as a simple £35 purchase quickly spiralled to £80!
My main reason for implementing this ban is that I want to save £250 a month to use for university tuition payments as I plan to go back to higher education this September. It’s definitely achievable but to do so means I will have to be more intentional and careful with my spending. I will have to make sacrifices and combat many triggers and overcome certain ingrained habits.
Fortunately I’m not the first person to attempt this, so there is a bit of a template to follow. I’ve been a long-time reader of Cait Flanders and her writing on personal finance. One thing she is very well know for is implementing a shopping ban, having even written a book about it.
The rules of the shopping ban are entirely up to you but the essence is that you only spend you money on bills, groceries, the essentials and any approved items that you chose before the ban starts. To borrow from Cait’s template here’s mine below:
What I’m allowed to buy:
groceries and basic kitchen supplies (plastic wrap, tin foil, etc.)
toiletries (toothpaste, soap, shampoo, toilet paper, etc.)
gifts for others
anything on my approved shopping list
true emergencies (health, lost transport card etc.)
What I’m not allowed to buy:
take-out coffee (this shouldn’t be too hard as I can easily prepare coffee at home)
eating out (I currently eat out about once a week but will allow myself to limited opportunities to go out with friends)
clothes (except for those identified on my approved shopping list)
household items (decor, furniture, etc.)
electronics and appliances
The hardest part of this will be participating in this shopping ban as part of a couple. While my partner supports me in this is will surely throw up some further challenges along the way.
I’ve been careful to not cut out all the fun and have budgeted for a couple of holidays this year and some entertainment.
None of this is set in stone and I’m sure I’ll make mistakes, learn what my triggers are and revise it as I go. The good thing is that I have a strong, clear goal to work towards which should keep me on track.