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Beat the Latte factor

a piggy bankCommunity member Hollyboo recently asked MoneyMagpie.com's Jasmine Birtles for advice on how to stop those impulse buys and 'bits and pieces' that drain an extra £250 a month from her family's budget

It is what has been labelled 'the Latte factor'; getting into financial trouble because of little bits of spending each day that adds up to a lot at the end of the month.

Happily, there is a lot you can do about this:

  • Give yourself a weekly budget, take it out in cash at the beginning of the week and keep your credit cards at home. If you have problems spending with your cards, cut them up and close down the accounts, except for one emergency one. If you have difficulty stopping yourself spending on that then get a bowl of water, put the credit card in the water and put the bowl in the freezer. It won't harm the card but microwaving it will so that if you get a desperate urge to splurge with your card you will have to wait a few hours while the water melts before you can use it. That should help give you time for the 'need' to subside!

  • Keep a spending diary for a month to track where you are wasting money. You only need to take a notebook and pencil around with you but you have to write down EVERYTHING you spend, however small. You will find after a week that you cut down because it's too embarrassing to write down yet another loaf of bread! At the end of the month you can see where the money is being wasted and that will help you cut back. Actually, it can also be helpful to write down how you were feeling at the time of each purchase as it could be that you're spending to make yourself feel better. If so, then that needs to be addressed.

  • Plan meals a week in advance, make a shopping list to go with them and stick to it. Force yourself to do a maximum of two trips to the shops per week. One is even better. The less you are in the shops, the less you will be tempted!

  • Be more aware of the subtle tricks that shops and other companies play on us to make us buy. Supermarkets are obvious (but we still fall for them). They use smells, lighting and product-positioning to make us buy. They know we turn right when we go through their doors, for example, so they put the buy one, get one free stuff there to entice us. They also put expensive branded goods at eye-level and cheaper stuff at the bottom and top. They want you to impulse buy and they are doing what they can to make you do so. Get angry. Get even; refuse to be duped! Get your friends involved too; don't spend where they want you to spend.

  • Check out my website MoneyMagpie.com. We have free tips on cutting costs and making a bit extra each month.



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