As a small business owner, you’re also a consumer. And as a consumer, whether for business or personal, there are many temptations to be found to spend your hard-earned cash. It can be easy to get carried away with spending on the things you love, however, this can lead to financial difficulties if not kept under control. If this sounds familiar and you want to spend less, here are 3 simple ways to reduce unnecessary spending for good.
Budget Your Outgoings
As a first step, checking your finances and being fully aware of your spending habits is crucial. If you are the sort of person who isn’t sure where all their money goes, taking the time to review what your non-essential spending is will help. This should be an eye-opening exercise to show you just how much certain spending habits amount to across the month, such as buying daily coffees, spending on clothing and more. To budget, you’ll need to identify your essential outgoings, and this should provide you with a disposable income. You can then work how much of this you want to use for savings or towards existing debt, or even for new credit. Once identified how much you need, you can reduce certain non-essential outgoings and decide a budget amount to stick to.
If You Need to Borrow, Choose Specialist Lenders
Whilst unnecessary spending is typified by non-essential items, it can also relate to borrowing money when you don’t need to. It can be easy to use credit or store cards or even buy now, pay later offers to spread the costs. However, you should only use credit when you really need it. When you do decide to borrow money, a bad credit loan is one option that can help from specialist lenders. As your credit rating may be low due to your financial situation, this type of loan can help provide funds to cover a short term emergency when you have no other options. The reason to use specialist lenders is so you can avoid harming your credit rating further, as long as you can afford to do so.
Cut-up Credit & Store Cards
A very simple thing to do which is effective if you do like to make purchases via store credit or a credit card is to physically cut up your cards. Even better is to shred them so you cannot read the card details. Physically doing this will mean you have eliminated the temptation to buy on credit through contactless payments, chip and pin or online transactions. Some banks and credit card companies will also allow you to set spending limits which is helpful when sticking to a budget. If your cards have a particularly high credit limit, you will always be tempted to use them, so being vigilant here is key.
These are just 3 of many simple ways to help you reduce non-essential spending and steer you on a path to a better financial future. The benefits of cutting down this type of spending will help you achieve your long term goals, such as increasing savings for a deposit or making a large purchase without relying on credit. Doing this alongside using specialist lenders when you do need credit in an emergency, will keep unnecessary spending at bay.