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‘No-Buy January’: the merits of a financial detox

‘No-Buy January’: the merits of a financial detox
Image source: Getty Images

Lots of us will have heard of dry January: a pledge to not drink alcohol for the entire month of January. But have you ever considered doing ‘No-Buy January’? With the spending hangover from Christmas, it could be the perfect time to give your finances a detox.

How much do Brits spend online?

It’s safe to say that the Covid-19 pandemic has turned us into a nation of online shoppers. Recent research from Merchant Machine found that as a nation, we spend an average of £3,432 shopping online – around 15% of our annual incomes.

That is a sizeable amount, and it’s no surprise that is where most of us head to. If you didn’t use and abuse your Amazon Prime membership in the past 12 months, where were you?

What is No-Buy January?

It’s kind of what it says on the tin. Doing No-Buy January means that you try not to spend money on anything but the essentials for the month of January.

That means stepping away from the winter sales and the start-of-year little pick me up. Having just come out the other side of Christmas, you probably have new things to keep you happy for a while anyway. So January could be the perfect time to cut back on your spending.

With No-Buy January, you get to dictate your own dos and don’ts. So, for example, your key rules could be no new clothes, make-up, home decor items or unnecessary toiletries for the entire month.

In normal circumstances, the no-buy rule could extend to social activities as well. But considering we aren’t doing much of that at the moment, you have already put yourself in a great position to save money.

How much could I save?

The beauty of No-Buy January is that it not only rebalances your habits when it comes to spending, but it could also save you a chunk of money.

If you accept you spend around 15% of your salary on online shopping, then working on an average monthly salary of £2,000, you could potentially save around £300 just through cutting your online spend. That is before you add in the money you could save on other discretionary spending, such as meals out or travel.

What could I do with the money I save?

If you stick to No-Buy January, then you could save yourself hundreds of pounds in just one month.

Rather than just going on a big spending splurge in February, maybe consider what positive impact this money could have on your financial situation.

First things first, if you have any outstanding credit card debt, it is always worth trying to pay this off before anything else. Unpaid credit card balances can quickly accrue interest charges, so paying off a chunk can have a positive impact.

If you have credit card debt, then maybe this is the time to build up your savings pot. As a newbie saver, consider an easy access savings account to start off with. This type of account means you can access your money at any time, so if an emergency expense crops up, you are covered.

However, if you already have your emergency savings stash, you could consider growing your No-Buy January money pot through an online share dealing account. This is one way to step into the world of investing, where it is easy to get a portfolio up and running – and often cheap.

If you are ok with a certain level of risk and don’t need to instantly access your money, then share dealing could grow your money in the long-run.

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