Being flat broke is no fun at all. Most of us have had at least one period of poverty, but when these periods last for months and even years, life can be turned on its head.
A paper in the American Journal of Preventative Medicine last year revealed that prolonged periods of poverty can even cause a loss of brain function. With that in mind, it’s important to have control over your spending habits so that they don’t end up controlling your life.
I’ve lived at both ends of the money spectrum: I’ve had periods where I’ve been fortunate enough to not worry about money at all, and I’ve had times where I’ve been so poor that that I lived on rice and butter for weeks. Yes, I know it sounds disgusting, and you’re right, it was! But it was all I had at the time.
Another time I had to pay for my shopping using 2 pence pieces. I spent 10 minutes inserting them one by one in to the coin slot at an automated checkout while people angrily shoved, huffed and complained behind me. It wasn’t my fault that there were no staff around and I was so embarrassed, but I needed to eat!
It was around that time that I considered taking out payday loan for those with bad credit, but as a freelancer I didn’t qualify.
There is no shame in being broke, but once we’re back on our feet, we should make it our number 1 goal to identify how we got there, and how to avoid it in the future.
Here are a few things that I’ve been doing lately to try to avoid being flat broke ever again.
Identify bad spending habits.
A bad money habit is something that could be avoided if we made the effort, but for some reason we just don’t.
One that I’m guilty of is paying for shopping on my debit card in my local corner shop, even though I know there’s a 50p fee. I could easily walk down the street and take money out of a fee-free ATM, but it’s quicker not to. I do this twice a week and spend £52 a year.
Another is buying Bags for Life instead of taking my own. Sometimes they’re 12p each. It doesn’t seem like much at the time, but if you buy 5 bags that’s 60p a week; which racks up at £31 a year.
See how quickly bad spending habits add up?
Curb emotional spending.
Buying junk food when you’re feeling down is okay once in a while, but if you find yourself binging on the daily, it’s not only going to damage your health; your bank account will feel it too.
The same goes for buying a few quick drinks after work to cheer ourselves up, or splurging on unnecessary beauty items at the make-up counter because we want to feel pretty.
It can be tough to know if you’re spending based on emotions, but a simple way to test this is to ask yourself: “Am I buying this for the *sole purpose* of making myself feel better?”
If the answer is “Yes”, and you know you can’t afford it, then put down the item and walk quickly out of the store.
Try finding cheaper alternatives for when you’re feeling emotional. To avoid buying chocolate I’ve started revisiting my creative side. When I’m down, I’ll pull out my art stuff and have a doodle, or I’ll try making music. I quickly forget I wanted chocolate and the creative outlet acts as a far better therapy than chowing down on a big bar of Dairy Milk.
I’m a late comer to Skimming so you may have heard of skimming already, but just in case; skimming is a kind of micro-savings method. Similar to throwing your pennies in a jar, but you do it via your online bank account instead.
Most current accounts these days come with a savings account attached. So, when you’re checking your main account, simply “skim” the excess pennies or pounds off to a rounded down number and deposit them in to the savings account.
It’s surprising how fast those pennies add up. And if you are ever on the verge of being flat broke again, you’ll always have your skimmed savings to fall back on.
Put a pause on luxury spending.
Luxury doesn’t have to be a brand new car or designer handbag. It can be that Spotify subscription you only use once a month. Or Sky TV that you watch once a week. Taxi’s to work instead of the train. Or even a simple £3 a day coffee.
There’s only so much time we have for entertainment so try choosing just one subscription a month. I bet you won’t even miss the others.
We don’t need that expensive daily coffee either, so find a cheaper alternative to your daily luxuries and put the money saved in to your new skimming account.
If you ever find yourself flat broke again, you’ll be wishing you’d curbed the daily coffee habit sooner.
I’m not saying you should give up on all the things you enjoy in life – that’s what we work so hard for right? So we can enjoy life. But it’s important to be mindful about our money habits.
You could save thousands a year by following these steps. For those of us who struggle with bad money habits, it might not happen overnight, and that’s okay. You haven’t got to do it all in one go.
Just picture your bank account in a few years’ time when those money demons have been exorcised from your life. Your money will be yours again to spend on the things and experiences you actually want in life.
Have you ever been flat broke? What actions did you take to avoid being there again?
Mental health of poverty study – http://www.iflscience.com/brain/long-periods-of-poverty-linked-to-loss-of-brain-function/