Invisible purchases
Most of us have been guilty of spending money without thinking about it from time to time – from our usual coffee on the way into work, or a scratchcard whilst at the supermarket getting groceries, to a Friday-night takeaway, it’s easy to spend almost unconsciously on small but regular items.
Indeed for some of us, these ‘invisible purchases’ make up a sizeable chunk of our day-to-day spending, and so it’s definitely worth being conscious of what constitutes these outgoings.
To begin with, you might like to try the One-Week Spending Challenge – a way of taking a snapshot of everything we spend in an average week, by writing down absolutely all purchases. So anything bought with cash, card (including contactless) and also online transactions should all get noted down. You could use the Notes function on your phone, the ‘live spending’ function on the Budget Builder, or good old pen and paper.
Once you’ve got the week’s spending captured, go through and pull out any ‘invisible’ purchases – things that you didn’t plan on buying, purchase more from habit than need, and that you probably didn’t think much about before you did.
If you want to see the impact of reducing some of these habits, you can try the method below, or use the MoneySavingExpert Demotivator tool to see how much you might save if you cut back on certain items.
a) Choose the item you want to focus on (e.g. a takeaway coffee)
b) Note down how often you buy it, and work out how many times per year that equates to (e.g. once a week - 52 times a year)
c) Note down the price (e.g. £4)
d) Calculate the annual total by multiplying b) by c) - so 52 x £4 = £208
That total is your invisible spend.
Now you can consider how you feel about limiting or giving up some of those purchases. We’re not saying that you shouldn’t be buying them - you may decide that even an ‘invisible’ item is important to you and that you want to continue to spend on it, and that’s a personal choice for you. But at least you’re then making a conscious decision to do so, and hopefully thinking about the outgoing in the context of your overall budget.
Working out our invisible spend totals can also help us to decide if we want to be spending that much money on the item it’s going on, or if we’d like to put it towards something different instead. For example that £208 that gets spent on takeaway coffees could go towards a weekend break or a new laptop - or whatever it is that would be significant for you. Again, that’s a very personal decision.
But being aware of our invisible spending, and either making a conscious choice to continue to spend it in that way, or to make a change, can be really empowering and gives us a feeling of control over our money.
