Paul Merriman, an Irish financial advisor, has exposed some costly everyday things that are secretly draining your money – and how to put a stop to them this summer
Piggy bank on a calculator(Image: Getty Images)
It is the time of year when people start to wonder how they can get their finances ‘summer-ready’ without resorting to extreme budgeting or cutting out every small luxury.
Delving beyond skipping morning coffee and tracking spending in spreadsheets, financial advisor Paul Merriman of askpaul is acutely aware that many are juggling personal finances amid economic fatigue.
Here is how to get your finances in order for summer, reclaim financial power whilst reducing invisible money drains, and build financial habits that are prescriptive to your lifestyle.
Confront Financial Avoidance
Perhaps the most important, and overlooked, step in getting your finances ‘summer-ready’ is addressing avoidance. This often stems from anxiety, not irresponsibility.
Many people delay:
- Opening bills
- Checking balances
- Reviewing accounts
Experts recommend starting small:
- Spend 10 minutes reviewing finances
- Open one statement
- Check one account
Progress is a sure-fire way to build confidence and, in turn, reduce avoidance.
Start a Subscription Autopsy
We are fully immersed in an age of streaming, apps and memberships. Subscriptions may have a small monetary value; combined, they can cost the same as a utility bill.
Instead of asking if you use the app, ask yourself the following questions:
- If I saw the app today at full price, would I sign up?
- Does the app enhance my lifestyle, or simply fill my time?
- Is there a free or cheaper alternative?
You can also try subscription batching, which is when you identify the apps that you do need to use every month and, therefore, only download and pay for them every other month. This ensures you don’t feel restricted while still keeping your spending in check. Subscription batching cuts costs by at least half without losing permanent access.
Make Way for Financial Friction to Stop
Automating payments is a great way to free up time and eliminate a manual task; however, it may be a good idea to introduce ‘financial friction’.
Financial friction makes spending harder, encouraging you to stop and think before you spend. A 10-second pause delays impulse spending, and research shows that minor interruptions encourage rational decision-making.
Financial friction steps can include:
- Deleting cards from shopping sites
- Removing one-step payment methods
- Creating a separate account for shopping, providing transparency to outgoings
Look out for Money Leaks
Not all financial drains are clear, as they are disguised as ‘normalised spending’. For each recurring expense, ask yourself whether it’s the cheapest option currently available, whether it’s a ‘must have’, and whether it’s worth the expense.
Normalised spending can include:
- Premium delivery services
- Banking fees on unused accounts
- Auto-renewed policies
- Energy tariffs that are never evaluated
Apply a Spending Strategy
The idea of implementing a budget often sparks thoughts of restriction and buyer’s remorse. Try reframing budgeting as a spending strategy. This alters the focus from limitation to intention and prioritises values over rules. Essentially, it encourages mindful spending over strict rules around avoidance.
Apply the Most Valuable Currency: Time
Much of the population is time poor, making dedicating time to anything very valuable and a currency in itself. Before you buy anything, equate the payment to time.
For example:
- A €120 purchase = how many hours of work after tax?
- A €30 takeaway = how much of your time?
This shouldn’t be led by guilt, but awareness. It highlights the true value of work behind money and raises awareness of spending.
Build Monthly ‘Financial Reset Days’
Instead of treating ‘financial admin’ as a once-a-year task, Merriman encourages scheduling a monthly ‘Financial Reset Day’ once a month.
Financial reset days can align with self-care routines, offering a moment to reconnect with your finances. A financial reset can include:
- Review spending
- Adjust and tick off goals
- Cancel unnecessary outgoings and those no longer needed
- Modify savings if needed
As with anything, the key is consistency. Those who check in regularly are significantly more likely to stay in control than those who rely on annual overhauls.
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