Your friends are planning a weekend away and before you know it, you’ve chipped in for the deposit. You work hard, it sounds fun, you deserve it.
Then your monthly bills start rolling in and you wonder if a spontaneous holiday was such a good idea after all.
We’ve been there. But if you find yourself committing to expensive trips or buying high-end items too frequently, one simple budgeting hack could help you keep impulse spending under control.
The trick, known as the 1% rule, is designed for those who often find themselves splurging on non-essentials.
If you’re thinking about treating yourself to a non-essential item – like a VIP concert ticket, a quick city break or a designer handbag – and it costs more than 1% of your annual income, take a beat.
Give yourself 24 hours before entering your last three digits to whatever shopping website you find yourself on.
How to scale back on impulse spending?
Impulse spending is buying something on a whim, without considering the long-term impact on your finances. While extreme cases might require stricter budgeting or professional help, there are some simple strategies to help scale it back.
Another money-saving hack ‘wage-weighting’ – which is when you think of items in terms of your hourly or daily wage.
If it equates to half a day at work – or maybe even if days – is it still worth it? Thinking about how long you’d have to work to afford an item could be the hack to unnecessary spending.
Alice Tapper, financial expert at Go Fund Yourself, previously told Metro: ‘The challenge we face is that it’s very difficult to conceptualise the real value of money.
‘When you consider the time you need to work to afford an item, it becomes a bit easier.’
This cooling off period allows time to re-think the purchase. If you’re desperate to buy it, there’s no harm in taking an extra day to think about it.
The rule was popularised by Glen James, host of the Australian finance podcast, My Millenial Money, and has since been shared widely by finance gurus on social media.
TikTok finance expert @frugal_spender recommends the trick to those earning less than £100,000 per year – especially those who earn just below or above the national average of £36,000.
He says the tip ‘doesn’t work for people on very low incomes and it doesn’t work for people on very high incomes’.
He explains: ‘So let’s say you’re on an average salary of £30,000 per year, 1% of that is £300. If you are considering making a purchase over £300, then you need to sleep on it.
‘You need to give yourself a whole day, 24 hours, to figure out whether that decision is the right one to make.
‘Now this doesn’t mean you can’t splurge your money, it just means you’re being intentional with what you’re spending. ‘
Finance guru @christosfellas also explained the rules to his followers, saying: ‘When you wake up in the morning you can weigh up the pros and cons of how that thing can actually bring you value.
‘Doing this will likely stop you from making those bad impulse buys and the things that you do go ahead and buy will end up bringing you lots of value.’
Matthew Sheeran, money expert at Money Wellness, tells Metro the 1% rule is a ‘simple and clever trick to stop those “should I, shouldn’t I” moments when you’re about to splurge’.
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He says: ‘It’s especially handy for those bigger non-essential spends, like new tech, furniture, or a weekend away.
‘Giving yourself 24 hours can be just enough time to dodge an impulse buy and figure out what you really want, or if it was just a “scrolling temptation” moment.’
However, the trick isn’t a sure-fire way to stop overspending.
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‘It’s not a magic fix for managing money or getting out of debt,’ Matthew adds. ‘It’s a great starting point, but for bigger money worries, you might need a more detailed plan.’
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