A ‘spendaholic’ or ‘shopaholic’ is often defined as someone who likes to shop and spend a lot. Normally, spendaholics buy things in excessive amounts – some of which they really have no use for – and spend beyond their limits. Over spending can result in excessive credit card repayment each month and, like those twenty pairs of shoes you could buy everyone week, credit limits you don’t actually need.
The signs of a spendaholic can be hard to spot in yourself but obvious in others. The biggest sign is the need to spend and shop constantly. Looking forward to your weekly spree in the town centre may seem like a healthy way to spend a weekend but it isn’t financially healthy week after week. If you only feel happy when you’re pushing your credit limit every month then you may in fact be a spendaholic.
Secondly is the need to buy things we won’t use. If you already have twenty pairs of shoes in your wardrobe that you don’t really go out in but you’re tempted to buy a new red pair then you really must ask yourself why. Constantly buying what we don’t need is a sign of excessive spending and, of course, a waste of money.
By spending too much you may find it difficult to stick to shopping lists when out and about. If you struggle to pay off monthly outgoings and find yourself raising your credit limits time after time whilst you’re still out looking for the biggest bargains and hording new shirts and shoes, you’re probably spending too much.
Spendaholics frequently spend their own necessities and means. A dangerous sign of a spending addiction is spending money set aside for your food, rent and bills, which will leave you short of your monthly essentials.
If you find that you’re spending habits are priority above everything else you could be heading straight for debt and financial difficulty. It’s a perfectly reasonable idea to spend the extra money in your bank account, as long as it really is extra and everything is paid beforehand. If you’re first desire when you get your wages is to blow it all in an Outlet store then take a step back and consider your situation – do you really need another new outfit, or should you buy your weekly food shop first?
Always keep an eye on your shopping and purchases. If you cut out all the credit cards and work out your monthly outgoings – including your shopping – with your monthly salary and your outgoings are more than what’s coming in then you’re spending beyond your means. It may be worth putting the wallet away for a few nights a week and eating in!
I quid a day for a quick snack doesn’t seem like a lot. Every little expense, however, can turn out to be a big shock to the system when added up over the weeks and months. Take a look at these five examples.
Cigarettes: 1.1billion people smoke in the world. If you smoke, on average, ten cigs per day you’re probably spending £3.50 or more a day. That’s £24.50 a week, nearly £100 a month and £1,200 a year. And that’s only if you smoke ten cheap cigarettes. Not everyone likes the idea of smoking but it really should be considered as the biggest money saver – if you really can’t give up, smoking ‘roll-ups’ could last three days longer. That’s £6-£8 per week, £32 per month and £384 per year on average, a total saving of £861 a year.
Morning Coffee: A Tall (small to me and you) coffee costs £3 in your average coffee shop. This is the same price of buying cigarettes – you can, of course, buy cheaper coffee but the price still mounts up. You yearly take-out coffee could pay a month of credit card bills and household bills – would getting up ten minutes early to make your own coffee really be too much effort to save nearly £1000 a year?
Take-Away: Can’t be bothered cooking? Buying a takeaway? If you buy at least two takeaways for a family per week it could cost as much as £50-£60, depending on your takeaway. Those quick McDonalds Burgers or chips actually cost an average of £550 per year – and that’s only the minimum one burger one chips order. Take the extra effort to make your own food and, even you really want to save, visit the local market where you can get a chicken twice the size of a supermarket bird for £2 and spend an average of £35 per week even for a family.
Travel Expenses: The bus stop I used to get on and off at for work would cost £1.80 per journey (£3.60 per day, £1,210 a year). For some odd reason, the bus stop not even two minutes before mine would cost £1.20 per journey (£2.40 per day, £806 per year). By walking more, even if you own a car or use a train, you could save yourself a surprising amount (and save your health). Be smart about travel – take the bus, not the taxi. Walk to the shop ten minutes away, don’t drive. It all adds up!
Brand Name or Value?: I would personally vote value if money is tight. ‘Value’ products are considerably cheaper than brand names if you shop at supermarkets – some branded toilet paper can cost £2.10 for two rolls, but the value can cost 59p for four rolls. The quality may be better, but you might even find you’re mostly paying for the brand name and packaging, not the product. Take a closer look when shopping for essentials.
Are you paying attention to your finances? Have you considered how much you could have been affected by the economic downturn? It’s harder to tell than ever whether or not we’re among the most ‘at risk’ in the country wide financial crisis. What should you think about when assessing whether or not you’re facing a financial disaster?
Do you know how much you owe?
Do you have a tight rope on how much you owe out each month or do you hide your face in your hands each time a bill is posted? Losing track of your spending is the quickest way to get into debt and the hardest way to get out of it – you don’t know where you’re spending big and what to cut out. This is a sure sign of financial trouble and an indications you have no control over your money worries.
Are you borrowing to pay off outstanding debts?
This is perhaps the biggest sign of financial trouble. By borrowing more to pay off existing debts you’re basically admitting you don’t have the money to pay off your other debts. Adding additional credit and payments will not help in the long run.
Can you afford savings?
If you can’t put any funds away for savings at the end of the month then this isn’t a good sign. You’re monthly outgoings could be swallowing up your salary and preventing you from making the emergency fund to get you out of future debt and, quite obviously, indicate that the majority of your outgoings are debts. If something arises other than a credit card payment, like an emergency breakdown, the stress with double in the form of charges when you sub your debt payments for something important.
Are you avoiding the situation?
Are you still spending even though money isn’t going anywhere and expenses are becoming extraordinary? If you’re avoiding talking about your huge credit card payment or phone bill, or quietly taking out another loan whilst still telling your partner you can afford to treat them to a three-course meal, you may be facing denial of your financial situation. Hiding from your troubles and hiding them from others only escalates a dangerous situation – don’t be afraid to admit to your tumbles and turns, ask for help.
Constantly worrying about your finances?
You may simply consider yourself a worry-wart, but be aware that this is the biggest shout-out when you’re in trouble. You should always tackle your main concerns before they grow – with your debt – and avoid denial or little secrets from friends and families. 61% of people don’t sleep because of stress when they’re in financial trouble – if you find yourself restless at the thought of next month’s repayments take it as the ultimate wake-up call and act immediately.
If you think you could be in financial trouble and are struggling to manage growing debts, get in tuoch with MoneySolve today for free, confidential, non-judgemental advice.
Despite using money in our everyday lives, complaining about how much things cost and working out our monthly salary vs outgoings, there might actually be a few surprising facts you haven’t heard about money and finance. We’ve listed a few of the most interesting facts around – from a brief history to the banking system, a few shocking debt statistics and our spending/debt habits.
•The UK is one of the very few countries in the European Union that doesn’t have the Euro as the currency and still retains the age-old British Pound Sterling.
* Countries around the world spend on average £1.1trillion on education, but £1.3trillion on the military each year. It seems not a lot of people’s priorities have changed with the (financial) times.
* In 1973 New Yorkers spent $100 million buying flowers. Looks like 100million lucky ladies in 1973.
* During the Middle Ages it was a custom for wealthy families to keep their valuables in the cellars of a goldsmiths’ shop. The goldsmith would give a written receipt for these items – the items (which included gold, coins and jewels) could be redeemed at any time with the receipt. Eventually, those who didn’t fancy running back and forth to the shop every time they needed money began using these receipts for purchases. Businesses throughout Europe began accepting these receipts and the practice spread – paper receipts and paper money became legal tender, which contributed to the banking system in use today.
* The first income-tax was collected in 1914 in America. Americans paid an average per capita tax of forty-one cents, and only 1 percent of the population had to pay Taxes.
* The inflation rate has risen by 2,066.87% since 1914. By using this, something that would cost £1 in 1914 would cost around £21.66p today. But remember – your salary and earnings also rise with inflation over such a long period!
* According to statistics, the cost of housing in the United Kingdom has risen and will continue to increase, with the latest at 1.7% in the previous year. Ask your grandparents how much they bought their house for compared to your own – you might be surprised!
* The Government’s National Debt (PSDN) increasing by £353,500,00 per day.
* The Great British pound sterling is the world’s oldest currency still in use and, as we mentioned before, Britain is one of the few countries whose currency has remained the same despite being in the European Union.
* UK personal debt stood at £1,457billion at the end of June 2010 and the 12-month grow stayed at 0.8%. That means individuals all over Britain owe more money than the country produces per year.
Those who think that only normal people with normal earnings get into debt would be surprised at these 5 celebs. With fame come the big bucks – and the big spends. It’s not just us mere mortals who may struggle with our money… the list of celebrities in debt is a long one.
Donald Trump makes it to the top for irony. The most famous real-estate developer in the country has struggled with huge debts since the ‘90s, forcing him to corporate bankruptcy and near personal bankrupt. An economic recession and huge bank loans cost the Taj Mahal Hotel (the flagship of his empire) $1million in debt. Donald was forced into bankruptcy and, in 1992, the Trump Plaza was also forced into bankruptcy. Although he did manage to pay off a staggering $900 million in personal debt by 1994 and recovered somewhat, his empire (Trump Hotels and Casinos) were forced into bankruptcy for the third time.
The King of the Ring Mike Tyson may have been a world class fighting machine but he couldn’t easily fight his way out of debt. The boxer earned an astonishing $300million in his career, which he spent on cars, homes, clothing, food and his two pet tigers. He racked up $27 million in debt and owed $13 million in taxes to the US Government at the height of his 400k a month lifestyle.
But not even Iron Mike could compete with the most well-known celebrity spender of all time. The late Michael Jackson, who was reportedly $500million in debt. He was rumoured to have spent $6million in a few short hours and spent $20-£30million a year more than he earned. Famously, Jackson was said to have willy-nillying said “I’ll have that, that, that and… have I got that already? I’ll have it anyway,” – and not just on a shop in Asda!
MC Hammer’s accountant should have probably pointed at his money and said ‘can’t touch this’. The star’s spending spree was well documented and talked about even after he was clear. He had a $12million estate, gold-plated ‘Hammertime’ gates, nearly 20 expensive cars, 2 swimming, a number of ranches and an impulsive spending lifestyle. He admitted that he had gone through nearly $20million on lavish items and even more through generosity to his friends and family. He filed for bankruptcy in 1996 and was drilled relentlessly by interviewers and TV shows for years to come about his financial state.
Even royalty is not unscathed by debt. The Duchess of York (or apparently the Duchess of Debt) has been told the only realistic way to pay off her £5million (and counting) debt crisis is the file bankruptcy. No senior royal has ever been declared bankrupt, and it’s not the first time for the Duchess after facing £4million previously.
The big boom of Antiques Roadshow and Cash in the Attic programmes have sparked a nation of hopefuls, scrawling through their cloggy attic dust, looking for something that might fetch them the big fortune. For awhile, we were all sure attic sprawling and clutter hording would become as frequent as the lottery hopes and dreams!
The main reason we horde the clutter is because we think it may be worth something years later – and, those same years later, probably forget why we kept it. The truth is everyone can be lucky enough to own something of significant value in the form of clutter; the story of Del Boy and Rodney finding the multi-million pound watch isn’t far from a fantasy.
Bernice Gallego from California found an antique 1869 rare baseball card in her attic; if it wasn’t for her daughter she would have sold it for £10 on eBay (when the card was actually worth £75,282). Or how about the lady who bought an authentic Jackson Pollock painting (for those who you who don’t know, Jackson Pollock is considered a master of expressionist paintings) for $5 for a depressed friend because she thought it ‘looked horrible, but funny’ (it was originally $8 but the buyer, Teri Houton, said she didn’t love her friend that much). The ‘horrible’ masterpiece is now said to be worth $50million.
Unfortunately, we’re not all Roadshow presenters. Anita Rhodes, a Malborough grandmother, sold a setoff HE Tidmarsh painting for £60 under expert advice from ‘Cash in the Attic’. She later learnt that HE Tidmarsh were widely sort after and wished she hadn’t let them go!
You might not necessarily find a Jackson Pollock or prize antiques but it’s always worth checking a few items before you chuck it all away. Most famous works or antiques are marked or signed by name; a quick search can tell you if it’s a jackpot or junk. Your grandparents might have horded a painting that was worth pennies in their time but a good solid amount nowadays – you never know!
And even if the hard attic crawl turns out no priceless works of art, you can at least flog them on eBay for 50p a pop – maybe someone else will gamble on them being priceless in 10 years time!
The economic recession has not had much impact borrowing and lending; in fact, lenders are still providing £170million to borrowers each day, and borrowers will pay more than £262million in interest that same day. The debt crisis is booming – and as the national debt grows, so does our personal debt.
There are enough salesmen tactics and borrowing breakthroughs to easily get you into to debt, but are there enough to get you out of it? Here, we list five easy ways to pay off debt quicker:
‘Snowball’ Your Debts
You may have already heard of this method but we’ll just give it the quick run through. Snowballing your debt is not the quickest solution but many have sworn by this method. You should first calculate all your minimum repayments on credit cards, loans .etc and note them down. Then, put each debt in order of interest, the highest first.
Minimum payments guarantee you pay the most interest for the longest time. You don’t want to drag debt misery on, but you don’t want to choke yourself financially. By snowballing debt you pay the minimum amount on the lowest interest debts but pay more than the minimum on the highest interest debt. This will clear the most expensive first and you can move down the list, with less to pay out each month.
Add to Your Income
No one really likes the thought of working two jobs or a bit of overtime. When the bite of debt does finally sink in you may find this the most suitable option. Use your skills – if you’re already working as a designer, try working freelance at home for one-off projects. If you’re particularly good at handy work, offer handyman services for a small fee. You don’t necessarily have to get an additional weekend 9-5 for extra cash flow.
Pinch the Pennies
Buying lunch at work can cost £5-£10 per day. By making food at home and buying ingredients yourself, spending an average of £6 per week, you could save an additional £4 a week (£192 per year). Apply this simple principle to other aspects, such as buying fresh instead of ready meals or using the local market were prices are a massive 70% cheaper than supermarkets.
Hide It!
Don’t hide your debts or hide away from them, hide your money, so to speak. If you want to save the wonga take it out of an account used daily, as you are more likely to spend when you see an account balance of £1000 and use what you intended to save. Invest in a savings account if necessary.
Don’t Be Afraid to Ask For Help
Use online debt calculators to help provide a rough idea of your outgoings and keep track of your money and debts with simple spreadsheets. Use online advice forums for quick tips and guidance. Keeping debt a secret and refusing help is definitely a bad idea; debt advisers, online money tip forums, debt management or even family members can provide an essential confidence to knock your debts on the head and speed into clear skies.
Whether it be through impulsiveness, bad luck or general lack of knowledge we have all, at some point, thrown ourselves into financial horror. The only real way to keep yourself completely out of the deep end is to keep your money tight – so here are five simple tips to keep you away from debt, doom and disaster.
1. Spending and not saving:
The easiest way to get into debt is borrowing (as we know!). When money is tight and urgently needed we often turn straight to loans. The truth is if you already have the money there from savings, you you can avoid paying back significantly more than you borrowed to greedy lenders. Pinch the pennies and build up a personal fund – stay ahead of your creditors!
2. Over-priced dream homes:
As a rule of thumb you should never buy a house where the mortgage or rent payments are more than 25 – 35% of your monthly income, leaving room for other monthly outgoings, emergencies and a bit left for yourself. That dream home can easily become a monetary nightmare otherwise.
3. Ignoring bills:
It may seem like a good idea to pay your electricity bill a few weeks after you move when everything is settled, or ignore debts you left behind, but the interest will keep piling and eventually turn into massive monthly repayments if not dealt with straight away. Don’t try and fool people, thinking they’ll forget. And if you do get into trouble, arrange payment or discuss repayment plans immediately!
4. Payday/Short-Term Loans:
For the few of us that are tempted to use these, avoid like the plague. If you do take out one of these high-interest loans, only lend the absolute minimum. If you need more than 30% of your next paycheque then consider other options rather than the quick and easy solution – you will only end up borrowing again when you come up short after paying off the first loan.
5. Not searching for deals:
You can be surprised how much money you can save. If you love shopping and spending money, try shopping for the cheaper deal first. Price comparison sites can be the most valuable form of window shopping!
Finally, remember you know yourself better than creditors or banks. Think before you jump into that ‘buy now pay next year’ you’re convinced you’ll save for monthly and pay bang on time. Would you really religiously save, or put it off month after month? Will you always stick to the ‘this is the last payday loan, I swear!’ deal? Interest and charges are how our lenders make their money; a frequent lender incurring a lot of charges is a gold mine!
