New ONS figures released this week indicate that the UK economy has returned to its pre-recession levels, with growth domestic product (GDP) expanding by 0.8% in the second quarter of this year. While this is good news, the importance of sensible saving and borrowing still stands: we still need to watch the pennies while supporting our local economy through spending.
Here are Credit Unions Wales’s top tips for spending sensibly:
Budget, budget, budget!
We can’t say this enough! Knowing where your money is going is the first step towards spending wisely. Once you’ve worked out how much of your cash goes on household bills, direct debits, travel and food each month, you’ll have a far better idea of how much money you have left to spend and save. The Money Advice Service’s online Budget planner is a really useful tool which lets you work out how much money you have left over after paying your bills.
Make a ‘need’ list
Whether you’re shopping for food, clothes, homeware or anything else, make a note of items you need – and stick to it! This will help stop impulse and non-essential item buys.
Shop alone
When shopping with children or even with a friend it’s all too easy to part with money you don’t need to spend – and not only in the form of new purchases. When you’re out on a shopping trip with a friend or with family you’re more likely to opt for a sit-down meal rather than just grabbing a sandwich, so you might end up spending more on lunch than on your shopping!
Pay in cash!
By using a debit or credit card when you’re shopping you’re taking your entire bank account with you, meaning you might be tempted to spend more. You’re also less likely to clock how much you’ve spent as you’re not parting with cool, hard cash. Make sure you only take as much money with you as you need – if you don’t have the extra money with you, you can’t spend it!
Beware of the 99p trap!
Pricing tricks are designed to get you to spend more without realising it. Every time you consider buying an item with ‘99p’ added to the end of the price tag, try rounding up the figure to the nearest pound and ask yourself whether you still want to buy it.
Be patient!
You might see something that you decide you need (or want) right now but try and wait until the sales. You could even be really thrifty and buy items out of season, such as Christmas wrapping paper in the January sales or shorts at the end of the summer. Your bank balance will thank you for it!
Remember birthdays
There’s nothing worse than realising you have to splash out on a present for someone’s birthday at the last minute and then being left short for the rest of the month. Forward planning is key to spending wisely, so put your family’s and friends’ birthdays in your diary at the beginning of the year.
Save as much as you can afford
You can’t spend sensibly without saving for a rainy day. No matter how thrifty you are with your spending, a broken boiler or a punctured tyre can be a real set back so it’s good to get into the habit of saving, even if it’s just a few pounds a week. Everyone in Wales has a local credit union, joining is easy and you can start saving straight away.
Get some extra help
If a rainy day comes along and you need some extra support, speak to your local credit union representatives to find out how they might be able to help. Credit unions offer loans with much lower interest rates than payday lenders, let you borrow what you can afford to pay back and set manageable repayments. They don’t rely on automated credit checks so real people will be able talk to you about making manageable payments in a time frame to suit you.
Borrow sensibly
Compliment your sensible spending with sensible borrowing. Make sure you fully understand the true costs before you borrow and be sure to compare the APR% between lenders. Checkout your local credit union and compare the interest rate with other lenders and banks.
Consider your local credit union
By joining one of Wales’ 21 credit unions, you are contributing towards investment in your area, helping to fund small business start-ups and community projects. Unlike banks, Credit Unions are owned and run by their members which means that any extra money they make is put back into services or returned to savers as dividends. Credit unions are regulated by the same watchdogs as banks and building societies and hold the same Government-backed guarantees, which offer protection of up to £85,000 per saver.
Find your local credit union via our website, and get in touch to find out how they could help you manage your finances and spend sensibly.
Credit Unions of Wales 