LEEDS, England – As personal finances are squeezed across the country, new research reveals the financial balancing act smart Brits are performing as they look to get maximum value from their everyday decisions.
The research* found that seven in 10 people choose to make trade offs, either in their lifestyle or in their spending, and the main reason is to make the most of their money (35%). 23 percent said it helps them enjoy their life more and 13% said it makes them feel more positive.
Top 5 Most Common Trade-offs
1) Travelling at off-peak times to get cheaper tickets (39%)
2) Buying food on offer in the supermarket to be able to afford other treats
3) Cutting back on spending now to have more money in the future (30%)
4) Walking as it is more eco-friendly, even though it takes longer (30%)
5) Having a shorter holiday but staying at a nicer resort (25%)
These financial balancing acts are most common on a shopping trip (61%), while 56% make these decisions with their holidays and 45% take this approach with their diet and lifestyle.
22 percent of people said they are prepared to spend more money on a single item of clothing as they feel they will get more wear out of it and it will last longer, whereas 20% take the opposite approach and shop in less expensive shops so they can afford to buy several pieces of clothing. Women are much more likely than men to buy a larger number of cheaper items (23% to 14%). When shopping 11% of people forgo personal treats such as coffee or magazines in order to save up and afford a more expensive item.
Diet and Lifestyle
One in five people do not drink in the week so they can enjoy a drink with their friends or partner at the weekend and the same proportion take this approach with their diet – watching what they eat from Monday to Friday so they can indulge at the weekend. An energetic one in 10 feel they can eat more generally as they burn off extra calories doing exercise like running or going to the gym.
Desperate to get away and escape the British weather, 56% make trade-offs to ensure they get the kind of holiday they want. For a quarter, this means having a shorter break so they can stay in a nicer resort, yet 23% make the opposite trade-off of going to a less expensive destination as it allows them to have a longer holiday.
Younger People Make Their Money Work Harder
Perhaps as they have less money, young people are much more likely to make compromises in almost all aspects of their lives as they try to make the money they have work harder for them. Almost eight in 10 said they do this (78%) compared with a low 64% in the over 55s. It would seem that money is the defining factor in this as 50% of under-24s said they trade off to save money, compared with just 29% of over 55s.
Half of under-24s said they travel at off-peak times to save money, compared with 35% of the older age group (55+). In one of the biggest differences, 37% of the under-24s said they shop at less expensive stores so they can afford to buy more items, more than twice the proportion of over 55s who do this (15%). Mindful of future expenses, the youngest age group are most likely to be cutting back on expenditure now in order to have more savings in the future (36%).
Karen Pine, Professor of Psychology at the University of Hertfordshire said,
“Millions of years of evolution have hard-wired our brains for offset thinking. Our primitive ancestors survived by making trade-offs – always reallocating resources to get the best from them. Modern decisions are different of course but people continue to engage in this type of thinking, whether it’s for food, holidays or travel, and will offset to get the best deal they can.
“So it’s not surprising that many people see the sense in offsetting and use it as a way of really making their money go further. The financially astute person uses their brain and regularly monitors their financial situation, and by offsetting they make the most of their money too.”
Davnet Reid, Head of Customer Marketing at first direct, commented:
“Even though people’s personal budgets are being squeezed, we are instinctively very good at weighing up our options to get ourselves the best possible deal, whether this is for financial reasons like getting cheaper train fares or for health reasons like being healthy in the week and relaxing at the weekend.
“It is interesting to see more young people taking this approach as they want to get the most value out of the money they have. If they can keep these habits as they get older and their income grows, they should be able to make their money go even further in the future.”
* Research conducted among 2,001 UK adults between 6th and 26th June 2012