Us Brits just won’t quit our spending ways: one in four people admit to a weekly shopping ‘habit’ according to a survey from online bank Cahoot. This is despite the credit crunch induced belt–tightening that we should all apparently be adhering to.
Clothes are top of the list with, on average, happy shoppers putting aside 10% of their monthly income to spend on clothing, shoes, bags, belts and whatever else takes their fancy. The sensible ones though are cutting back on other areas to justify their fashion–focused purchases. Cahoot’s research revealed 29% would limit their nights out so they could still justify their shopping habit and 28% would cut back on eating out. Beauty treatments (12%) and even food (five per cent) would also be curtailed if it meant keeping up with all things fashion.
More worryingly though is the one in seven Brits who admit to using their overdrafts, car and even mortgage repayments to fund their shopping splurges. Research from GE Money shows that over a quarter of Britons feel out of control with their finances. The survey also showed that 37% say their spending habits have changed in the last six to 12 months with the majority spending less money – so if we look at both surveys does that mean people are cutting their spending but shifting the saved amounts so that they can still get their shopping fix?
With all of this in mind I thought it was worth conducting my own shopping check–up to make sure I’ve got things in control. I’m not in my overdraft and my stock response to someone saying they like something I wear is “Thanks, I got it from Primark” or “It was in the sale” so while I have a lot of clothes (warped rail in wardrobe testament to this) I smugly tell myself that they were basically all bargains.
Sadly, my bank statement differs with this view. Yes I don’t have an overdraft but I also spend more on throwaway things: clothes, food, CDs and going out, than I should. Making myself add it all up certainly made me squirm. Even yesterday when I only went to the shops for some paracetamol, I totted up nearly £12 on a pot of £9 moisturiser, £1 on a facemask and £1.50 on the Big Issue because I liked the vendor’s dog Cass. And yes, I forgot the paracetamol. Still, no clothes… then my friend calls me. She’s at her local Primark store and the coat I liked is reduced to a ridiculous £3, do I want it? Given the tenner I handed over for some moisturiser what do you think I said? That is added to the £10 shoes she phoned me about a couple of days ago.
None of it is expensive but in a short space of time I’ve spent money on things I don’t particularly need. To use a cliché it all adds up. In one way, the constant harping on about the credit crunch has made me more aware of what I’m spending my money on – but because, for example, the possibility of affording a flat deposit is so distant and near enough impossible at the moment, I don’t have enough incentive to really plan ahead. The money that I could use to start saving towards a deposit ends up being wasted on frivolous buys. (At this point before someone makes a comment I should point out that I’m not including the Big Issue in that category.)
Yet if there is anything positive to be gleaned from the general misery that is the credit crunch, it is the wealth of savings products out there. Halifax has launched a limited edition (ends 20 July) regular savings account, paying an impressive 10% AER. With higher interest rates on offer than in previous years, I should be looking to make the most of the money I do have. I may not be about to get my own place just yet but a high–interest savings account and an ISA will hopefully encourage me to add more money to my savings pots and spend less on the high streets.
Nathalie Bonney is editorial assistant at Moneywise