Could the 5:2 money diet make you rich?

Debt can cause anx­i­ety and stress but Alix O’neill dis­cov­ers there are sim­ple tricks which can lighten your fi­nan­cial mood

The Daily Telegraph - - Front page -

Last week­end, I set out on a mis­sion to buy nurs­ery es­sen­tials for my first­born, who ar­rives in De­cem­ber. I came home not with baby grows and a breast pump, but with six cham­pagne flutes and a Broste Copen­hagen salad bowl. Given the drink­ing lim­i­ta­tions sur­round­ing preg­nancy, the for­mer was per­haps an ill-ad­vised pur­chase. As for the salad bowl, I’d ar­gue an in­jec­tion of Scandi-chic is es­sen­tial in any home.

But then my spend­ing habits have never been par­tic­u­larly shrewd. I’ll opt for ar­ti­san bread over sliced, hop into an Uber in­stead of tak­ing the bus, and ev­ery time I em­brace a new in­ter­est, I’ll con­vince my­self I must have the ac­com­pa­ny­ing para­pher­na­lia be­fore I can pos­si­bly com­mit. I start each month vow­ing to live within my means, but be­fore pay­day comes around I’ll have dipped into my sav­ings to fund my bon viveur life­style. The shameful truth is, I’m 33 and have never man­aged to stick to a bud­get.

I’m not sure if this is re­as­sur­ing or not, but I’m far from alone. In May, the Money Ad­vice Ser­vice re­vealed that one in six adults is on the brink of be­ing tipped into a debt cri­sis, and it’s not just poorer house­holds who are at risk – debt char­ity Stepchange says most of those who ap­proach them for help are em­ployed, some in se­nior roles, while one in five owns their own home. Mean­while, a sur­vey last year found that a third of mid­dle-class fam­i­lies would need to bor­row to pay an un­ex­pected bill of £500, and one in 10 couldn’t even rus­tle up a spare £100.

Thanks to parental help with a deposit, back when liv­ing in Lon­don didn’t re­quire an oli­garch’s in­come, my hus­band and I are lucky enough to own a small flat in the cap­i­tal. We earn rea­son­able salaries and, be­tween us, have mod­est sav­ings. That said, as a free­lance writer I have no pen­sion (en­tirely my own fault – why in­vest in the fu­ture when you can have a Dip­tyque can­dle now?), am not en­ti­tled to ma­ter­nity pay, and the pre­car­i­ous na­ture of my job means that work could dry up at any minute. Like many of my friends, I have a mod­icum of debt – around £1,000 on my credit card and a £500 overdraft. And while my pe­cu­niary sloven­li­ness isn’t caus­ing me sleep­less nights just yet, I have that un­set­tling feel­ing you get when your kitchen is os­ten­si­bly tidy, but the in­nards of your cup­boards tell a dif­fer­ent story. My fi­nan­cial house is in des­per­ate need of the Marie Kondo treat­ment.

Psy­chother­a­pist Re­becca Mccann tells me: “So­ci­ety has nor­malised a cul­ture of im­me­di­ate grat­i­fi­ca­tion, but our brains are sim­ply not wired for the con­tin­ual stress and anx­i­ety debt can bring. It’s not about how much you earn – it’s about liv­ing be­yond your means. Each splurge con­tin­ues a cy­cle of un­hap­pi­ness that can have a se­ri­ous im­pact on phys­i­cal and men­tal well-be­ing.”

Well­ness is big busi­ness. We’ve be­come ob­sessed with the pur­suit of health and hap­pi­ness, so per­haps it was only a mat­ter of time be­fore we turned our at­ten­tion to clean­ing up our spend­ing, too.

Last week, the

Chan­nel 4 doc­u­men­tary How to

Re­tire at 40 re­vealed the grow­ing army of “su­per savers”, aim­ing to be­come mort­gage-free in mid­dle age by mak­ing pru­dent pur­chas­ing de­ci­sions. One par­tic­u­larly thrifty thir­tysome­thing cou­ple caught my at­ten­tion, for squir­relling away an im­pres­sive

£14,000 a year by tak­ing in­spi­ra­tion from the 5:2 diet.

Rather than in­dulging for five days of the week and be­ing spar­ing for the re­main­ing two, how­ever, teacher Nicola Richard­son, 30, and her part­ner, Dave, 34, flipped the plan on its head, and for five con­sec­u­tive days a week they don’t spend a penny. Not on a sin­gle cof­fee, sand­wich, trav­el­card or any other daily es­sen­tial – which in­volves a level of week­end or­gan­i­sa­tion that I’m not sure I could ever reach. Luck­ily, a plethora of mo­bile apps make track­ing your spend­ing as sim­ple as your step count. Money Dash­board, for ex­am­ple, lets you view all of your in­com­ings and out-go­ings in one place. It then clev­erly groups sim­i­lar trans­ac­tions to­gether to high­light ex­actly how much you spend – handy for shock­ing you into cut­ting back on eat­ing out or tak­ing your own cof­fee to work. Al­though at­ti­tudes to­wards money are typ­i­cally fixed by the age of seven, ac­cord­ing to the Money Ad­vice Ser­vice, Lisa Con­way-hughes, also known as Miss Lolly (miss­lolly. com), says there’s still time for me to tem­per my prof­li­gate ways. She ad­vises me to set a “splurge” bud­get ev­ery month – “have a sep­a­rate ac­count for ‘fun’ and when this is gone, it’s gone” – and three pots of sav­ings: a short-term cash sav­ings ac­count, an in­vest­ment ac­count for medium-term (5-10 years) and long-term sav­ings, i.e. that pen­sion. “You should be sav­ing 10 per cent of your in­come and putting half your age (so 16.5 per cent, in my case) into a pen­sion, plus set up all out­go­ings to leave your ac­count on the day you get paid.”

Af­ter speak­ing to Ms Con­way­hughes, my mood is lighter and my wal­let heav­ier – I re­sist the urge to Uber home from book club that evening, sav­ing my­self a ten­ner. My fi­nan­cial house may not yet be clean, but those cup­boards are start­ing to feel a lit­tle­ti­dier.

All change: Apps can help di­vert ‘must-have’ in­dul­gences into sav­ings ac­counts and pen­sion plans

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