Welcome back! Last Saturday, we embarked on a journey together to tackle the often-awkward but oh-so-important topic of money. And here we are, diving into the second instalment. If you missed the first post, no worries - you can catch up here. Go ahead, I’ll wait for you. 😊

Last Week’s Activity: A Step Toward Clarity

So, how did last week’s activity go? I know paying bills isn’t anyone’s idea of fun, but hey, it’s part of life, right? The silver lining is that you’ve taken a huge step toward financial clarity. You now have a clearer picture of your baseline expenses - what it costs just to get by. That includes your rent or mortgage, utilities, food, and transport. Everything beyond those essentials - like gym memberships, daily takeaway coffees, or tempting food deliveries - are “wants.”

I’m not here to tell you to give up the little joys that make life brighter. But let’s be honest - they’re not as essential as food, water, heating, and shelter.

If you’re struggling to cover those basic needs, we need to look at increasing your income. Living costs are high, and it’s not easy. But for now, let’s look at ways to trim down those essential expenses.

Ways to Cut Essential Expenses

If covering your basics is a challenge, here are practical steps to ease the burden:

• Shop Around for Better Rates: Compare utility providers, home insurance policies, and mobile or internet plans. Switching can save you a lot of money.

• Reduce Energy Usage: Small changes like turning off unused lights or using energy-efficient appliances can add up.

• Council Tax Discounts: If you live alone, check if you’re eligible for a single occupancy discount.

• Smart Shopping: Stock up on essentials by buying in bulk, watch for sales and reduced-price items, and give supermarket own brands a try - they’re often just as good for a fraction of the cost.

• Negotiate with Providers: Don’t be afraid to ask for discounts or mention that you’re thinking of switching providers.

   

Each small step might feel minor, but together they create noticeable shifts in your financial landscape.

Small Shifts, Big Wins

Let’s celebrate your progress so far. Last week, you tackled a powerful first step: taking a clear-eyed look at your finances and identifying your non-negotiables. That’s huge! Many people avoid this step for years. By taking action, you’ve already moved closer to financial clarity than most.

This week, it’s time for the next step: examining your discretionary spending.

Step 2: Separating “Needs” from “Wants”

Your non-negotiables are covered. Now, let’s look at the extras - those discretionary expenses that aren’t essential for day-to-day living but bring joy and variety to your life. These might include:

• Takeaway coffees ☕

• Eating out 🍽️

• Streaming subscriptions 🎥

• Day trips 🚗

• Impulse purchases 🛍️

How Do You Know What’s Discretionary?

Ask yourself:

1. Is it essential for survival or basic daily life?

   • Essential: food, rent, electricity, transport.

   • Non-essential: Dining out, luxury skincare, or that new gadget you’ve been eyeing.

      

2. Does this expense reflect what’s most important to me?

   • (Spoiler: We’ll dive deeper into this next week when we discuss values-based spending.)

This isn’t about guilt-tripping yourself - it’s about gaining clarity. When you have a clear picture of where your money goes, you can make smarter, more intentional choices that align with your values and what truly brings you fulfilment.

The Partner Perspective

If you share finances with a partner, this step is even more impactful when done together. Here’s how:

• Use Two Colours to Highlight Expenses: One colour for your discretionary spending, another for your partner’s.

• Find the Overlap: Identify shared “wants” (like date nights or holidays) versus individual priorities (like hobbies or memberships).

   

This process creates a foundation for meaningful conversations about aligning financial goals - while respecting each other’s individuality.

Why This Matters

Here’s where the magic happens: separating your needs from your wants gives you the power to prioritise. You might notice spending patterns - like expenses that bring little joy - or opportunities to redirect money toward what truly matters to you.

And don’t forget your peace of mind. Building a cash buffer for unexpected expenses or redundancy can be a game-changer. We’ll talk more about this next week (and I might sneak in a midweek post with examples to help you along).

This isn’t about cutting out all the fun stuff. It’s about intentional spending - so your money works for you, not the other way around.

What’s Next?

For now, focus on completing this step:

1. Review Last Month’s Discretionary Spending: Take a look back at your expenses and highlight all discretionary spending. By now, you should have your “needs” and “wants” marked in different colours.

2. Celebrate Your Progress: Every step forward counts. Take a moment to acknowledge your effort and give yourself credit for the work you've done.

    

Next week, we’ll explore how to spend in alignment with your values - a game-changing strategy that makes every pound you spend feel purposeful and impactful.

See you next Saturday!