NON-ESSENTIAL SPENDING UP 60% : How to spend responsibly and keep your debts in check

Non-essential spending is on the rise, increasing by 60% since April as Covid restrictions continue to ease in the UK. According to recent financial data, Brits are spending more on holidays, leisure and clothing in recent months, with the amount spent on eating and drinking surging by more than £1bn, since hospitality restrictions lifted earlier in the year.

Contactless transactions, including payments made via mobile such as Apple pay, have also increased substantially as consumers take advantage of the end of lockdown.

According to the personal finance experts at money.co.uk, this recent surge in spending means it has never been more important to spread the cost of non essential spending, otherwise you could find yourself in a tricky situation financially.

Salman Haqqi, personal finance expert at money.co.uk, said: “Now that lockdown restrictions are easing, the temptation to go on a post-lockdown spending spree is hard to ignore.

“If you do want to treat yourself, it’s important that you either spread the cost responsibly or roll back your spending in other areas to compensate for your extra outgoings.

“One of the quickest ways to find extra cash is to review the various subscription services you may have signed up to at the beginning of the pandemic.

“If you joined multiple streaming services due to cinemas closing, or meal kit subscriptions due to the absence of restaurants, simply cut them off to save yourself some cash in a flash – that money can go towards your social budget.

“What’s more, now is the best time to look at your gas, energy and broadband suppliers to find potential savings. If you’re on a variable rate tariff for your gas and electricity for example, making the switch to a fixed rate tariff could potentially save you hundreds of pounds over the course of the year.

“Alternatively, it might be worth switching providers. Some brands will give you cashback or vouchers if you make the switch, so that could be another way to boost your social budget.

“If you’re still struggling to prioritise your finances, one of the most tried and tested methods of budgeting is the envelope method.

“Back in the day, you’d put cash for each expense: household bills, social, food etc, into dedicated envelopes so you had a hard limit on your spending for each area.

“Nowadays, it’s easy to do this virtually using budgeting tools. You don’t even have to download any specialist software to get access to this – most digital banks like Monzo and Revoult, or budgeting apps such as Yolt or Moneydashboard have these features as standard.

“Above all else, when you’re working out how much should go into each virtual envelope for the month, prioritise any debts before you work out your budget for other areas.

“Overdue credit card bills or other loans will rack up interest the longer they remain unpaid, as well as incurring potential fines – so make sure you have enough money to cover them before you put cash into your other ‘envelopes'”

“If you’ve taken steps to claw back some cash and are still struggling to cover your debts each month, check our our comprehensive guide to dealing with debt: https://www.money.co.uk/guides/dealing-with-debt-where-to-start.htm”

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