Jason Discusses What to Do With Money Saved From Not Drinking for a Month - with Esther Shaw for compareandinvest.co.uk
The original article was published on compareandinvest.co.uk on 13th January 2025.
As part of our mission to empower as many people as possible to make better financial decisions, we have published below all the information Jason shared with them, so you get the maximum benefit from it (not just from what was published).
NEW YEAR'S RESOLUTIONS ARE GOOD
Just like New Year’s Resolutions, a large part of financial planning success is about creating good habits that are repeated month in, month out.
Dry January is about improving your health and proving to yourself that you can conquer a personal challenge. The motivation isn’t generally to save money.
This article looked at research from Alcohol Change UK which found that giving up alcohol for the whole of January 2024 saved, on average, £118.
You could put the £118 saving into a high interest bank account paying, say, 5% p.a. and this time next year you might have earned enough interest to treat yourself to pint in your local pub. It’s nothing to get too excited about.
LONG TERM HABITS ARE BETTER
What is more interesting though, is if through cutting down on alcohol or other discretionary expenditure items, you were able to get into the habit of saving an extra £118 every month.
Let’s say that you put that money into a stocks and shares ISA and got a return of 5.5% p.a.
After 10 years you would have built up £18,908
After 20 years it would be £51,640
After 30 years it would be £108,300
Inflation will, of course, reduce the value of these numbers in today’s money.
It’s not going to be enough to retire on - you can’t expect that for £118 per month – but it might still make a meaningful difference to your long-term financial security.
CONTROL YOUR EXPENDITURE
Getting a grip on expenditure is by some stretch the biggest factor in the success or failure of most household financial plans. Yet it is often the most overlooked.
Whether it is through cutting down on alcohol or on some other form of spending, many of us could reduce our expenditure on items that are not giving us much value in the present and put that money aside to benefit us in the future.
GET IN TOUCH
If you would like to discuss any questions you have around controlling your expenditure, or any other help you need to plan your own financial future, please call us for a free consultation on 020 3488 9505.
The value of your investments can go down as well as up, so you could get back less
than you invested.
Tax and Estate planning is not regulated by the Financial Conduct Authority.