YOLO – You Only Live Once. Sometimes used as a verb to describe doing something reckless, or sometimes in my case, used to describe a purchase. Did you know that there are more than five million “YOLO” purchases made every day? That's a whopping £167 million spent on the impulsive buying every day. One in four of these YOLO purchases are made on credit.According to the Money Advice Service, more and more Brits are using YOLO thinking to spend money without considering the long term effects. The most common time for these YOLO spends is just after pay day, which I am definitely guilty of! After a month of working hard, I love to treat myself to something special. Other excuses behind YOLO spending include rewarding ourselves and cheering ourselves up. We are most likely to buy clothing, eat out, order a takeaway, buy the latest gadgets or book a holiday.
Why is YOLO spending a problem?
If you have worked hard for your money, then why is YOLO spending a problem? YOLO spending can become an issue when you are spending more money than you have coming in. A few YOLO treats here and there can soon mount up, and you may find yourself struggling to cover your bills, or having to make cut backs elsewhere to fund your spending. YOLO spending could lead to an increase in your credit card debt, as one in four people admit to putting their YOLO purchases on plastic, leading them into debt by an average of £293.
Of course, YOLO spending is fun in the moment, but the fun can soon wear off. One in eight people soon regretted their impulse purchase(s) and one in five promised themselves that they wouldn't do it again.
Changing your YOLO spending habits
The good news is that with the new year just around the corner, it is a great time to look at your finances and set yourself resolutions to curb your YOLO spending.
Firstly, you need a budget! This lets you know how much money you have spare as your disposable income. Spend some time completing a budget, and try to think of everything, including those pesky annual spends like car insurance, and even budget for your savings. Then you can see how much you realistically have left over to spend.
Before making a purchase, ask yourself if you really need it and if you can afford it. If you do need it then you can still save money by using price comparison tools, cashback websites and even vouchers.
Remember to not be too hard on yourself when it comes to impulse purchases. By budgeting for impulse spending, it shouldn't increase your debt or put you into financial hardship.
Are you a YOLO spender, or do you carefully plan your purchases?
This post is in collaboration with Money Advice Service.