Many of our financial choices are dictated by our circumstances.
So if we’re, say, struggling with our energy bills, we might reach for a blanket before putting on the heating.
Or if we feel we’re paying too much in the supermarket, we might buy own-brand products instead of expensive brands.
With the cost of living crisis having such an impact on our lives in the last few years, many of us have been forced into making choices like these every single day.
But it begs a question - would we start behaving differently if money suddenly wasn’t a problem?
A study by KPMG has looked into whether people would change their behaviour if they had more disposable income available, and the results make interesting reading.
- just 9% said they’d buy fewer own-brand or value products
- only 9% said they wouldn’t shop at discount or lower price stores as often
- just 6% said they’d buy fewer promotional or discounted goods
- only 6% said they’d use retailer loyalty schemes less
So what does this tell us?
Well, it seems many of the lessons we’ve learned throughout the cost of living crisis to make our money go further have become permanent habits.
So even if we find ourselves on a firmer financial footing, we still want to make sure our money is working as hard for us as possible.
Linda Ellett, KPMG UK’s head of consumer, retail and leisure, said: “Many of these behaviours when shopping are so instilled now in many of us, that even when posed with the scenario that essential costs ease, providing more cash in the pocket, few would reduce their cost-cutting buying behaviours.
“Consumers instead are far more likely to save any extra cash.”
Rising mortgage costs influencing spending decisions
While the rate of inflation has fallen in the last few months, that doesn’t mean prices are coming down across the board.
Many homeowners, for instance, will be seeing their fixed rate mortgages come to an end and having to change to more expensive mortgage deals.
As a result, many will be looking to save money elsewhere, such as in their food bills.
“This is reflected in half of consumers telling us that they’ve cut non-essential spend so far this year, and one in three saying they are using even more cost-cutting tactics when shopping,” Ms Ellett said.
The cost of living crisis, which saw inflation soar to double digits and hit a 40-year high, has clearly had a lasting impact and prompted many of us to completely change our relationship with money.
Issues such as budgeting and saving have become much more important in our lives and part of our day-to-day thinking.
That can only be a good thing, as it means we’ll be better placed to make the most of our money and better prepared if and when our circumstances change.
Written by James Glynn
Senior Financial Content Writer
