Committing to making money wise decisions?


Our personal spending habits greatly affect our future financial opportunities, something we’ve talked about here at TWiCE before. Whether it’s buying that extra coffee as a little pick-me-up, or picking up the latest gadget, impulse buying can end up costing you quite a bit when it all adds up and we want you to focus on growing your money, not spending it.

Everyone likes to have a little bit of an overspend every now and again, and there isn’t anything fundamentally wrong with that. Going out and doing the things you want to do and spending money on the things you want is a natural part of life, if not key to a happy and healthy life. When short-term spends become a more common occurrence though, is when short-term gain can end up setting you back an extra step financially. Recent data shows that UK household savings are expected to drop to 4.9% of GDP, about half of what it was just 6 years ago; this downward trend is expected to continue. An important part of a strong financial position is having a safety net, so you can have the room to save, spend, and invest how you want when you want.


We here at TWiCE, believe that you can take a measured approach to spending by spending less on what you’d like and still saving so you can get ahead in the future. A monk’s lifestyle isn’t for everyone (nor should it be), so it’s important that if you treat yourself, you do it smartly. If you do go out and spend a little extravagantly, it’s important that you manage it in a way that makes it a good overall spend and not a bad one. But what is a ‘good’ overspend?


A good overspend is generally when you spend your money on something that has a great deal of lasting value to you. In most cases it is something that you have thought about for a long while and still strongly want. This could be anything from a new pair of jeans, to a phone upgrade because your current one isn’t doing the job (as opposed to it just being new). The important questions to ask when yourself when you are going to make that commitment are ‘why do I want this?’ and ‘will I continue to find value in this?’



If that is the philosophy behind a 'good' overspend, then what constitutes bad or extravagant spending?


A bad overspend can mean any number of things. Most commonly its an impulse buy that is made in the heat of the moment, when you haven’t sat and thought about its value. The true value of a purchase like that really comes to light a couple of days afterwards. You might regret your purchase, or forget about it and move on.


What also might be described as a bad overspend is when you’re spending quite a bit on consumable, throwaway items. They might have some value, but in the long term one of two things generally happens. Option one is once their value is diminished they are thrown away, creating wastage both in the literal sense and in terms of your money. The other is that once the item is used, the same thing will need to be bought again later. These items are generally highly priced for their value in the first place, in which case you have an expensive and recurring cost that hurts your bottom line. Ask yourself often, am I being money wise in my spending?


Part of what TWiCE is about is helping people be better equipped with the right financial knowledge and tools to succeed. This ranges from what you have read here, all the way to helping people find out how they can use their money better to get ahead, giving them a fair shot at financial success. Check us out if you’d like to find out more about what TWiCE does. If you want to learn more about how money works, and how you can make money work for you, click here.

- Tom L


Disclaimer:  The above information does not replace financial advice.  Please ensure you seek independent financial advice before making any decisions regarding your finances.  We also recommend that you carry out your own research to ensure that this is right for your own unique circumstances.  Please note that we sometimes link to other websites but we cannot be held responsible for their content.



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