Tips for smarter spending

The key to a healthy bank balance is to always be in control of your spending…

This might sound obvious, but in reality it's not always as easy as it seems. From hidden costs to tempting purchases, there are many challenges that can trip you up.

The 50/30/20 rule is a popular method for managing your regular spending habits.

The idea is to break down your monthly outgoings into the following pots:

These are your essential living expenses, such as rent or mortgage, your bills, food and travel to work or college.

These are non-essential expenses, such as eating out, shopping, vacations and subscriptions to your favourite services.

This is money you're putting aside for a rainy day. If you have debts such as credit cards, overdrafts or a personal loan, you should prioritise using this money to pay them off more quickly. After that, you can explore opening a savings account, investing your cash or contributing to a pension fund.

When it comes to the 30% that you're spending on things you want or enjoy, you can make this money go a lot further by watching out for some common pitfalls…

Many of us spend time using free apps or games on our smartphones. These can be great fun, but be aware that many will contain in-app purchases you have to buy to access new features.

These costs are often relatively small, but they can quickly add up. Some will even charge you a recurring fee that you can easily forget about.

Action: Make sure you know exactly what you're downloading before hitting the buy button, and keep a record of the amount you're spending each month on extras.

Subscription-based services will often entice you with a free trial that grants full or partial access to their platforms. But as soon as that trial comes to an end, you'll usually start to be charged as soon as that trial comes to an end - and you might not get an opportunity to cancel beforehand.

Whenever you sign up to any kind of free trial, whether it's from a streaming service, an online retailer or a recipe box delivery, make a note of the trial end date and be sure to cancel in good time if you don't want to keep using the product. 

Action: Set a reminder to cancel your free trials before the payment period kicks in.

Scams on social media are on the rise, and even the savviest among us can easily be caught out. From fake dating profiles to new ventures that promise to turn you into an entrepreneur or influencer with tons of cash, you may be contacted with promises that seem too good to be true - which usually means that they are.

Always do your research, and never share personal details that could be used to access your bank account or social media.

Action: When somebody you don't know promises you something or asks for something in return, exercise extreme caution and do a proper background check before proceeding. 

Gambling can often seem like harmless fun, but it needs to be taken seriously. Problem gambling among under 18s is on the rise worldwide, and it can massively impact your money, your mental health and your relationships. 

Online gambling can be particularly addictive, as it's easy to access and not always monitored as strictly as it should be. An occasional small flutter can quickly spin out of control if you're not careful. 

Action: Gamble in moderation or not at all. Never chase your losses, and avoid combining gambling with alcohol or other substances which may impair your judgement. 

In addition to following the 50/30/20 rule, you can break down your spending even further by creating a budget. This can help you to keep a clear view of your non-essential spending and identify areas where you can cut down without sacrificing your favourite treats or activities.

There are many websites, apps and tools that can help you to create and maintain a budget. Try them out, and you may be surprised by how much you save.

Action: Write down everything you spend in a single month, and break it down into expenses that you're happy with and ones that you could do without.