A consumer expert who has spent six years studying how British households behave with their money has revealed the common cutting-back mistake she sees time and time again. Laura Gillespie, Co-founder and Insights Director at Konfidant, says people often focus first on visible expenses such as meals out, trips and other treats because cutting them provides an immediate feeling of financial control.
But she warns the biggest drain on someone's finances could actually be somewhere else entirely. She calls the behaviour the “bad maths of control”.
The 'bad maths of control'
Laura said: “In the households I speak with, people cut the things they can see – the trip, the meal out, the charity donation – because doing so makes them feel in command of their finances.
“The biggest financial leak might be somewhere else entirely and go unaddressed.”
Since March 2020, Laura has been tracking how British households feel about money, confidence and spending through consumer intelligence firm Konfidant. She has since then seen more than 650,000 survey responses, speaking to 2,000 people every week about their mood, confidence, spending and wider attitudes.
National optimism and politics
The research suggests the way Brits feel about the future is becoming increasingly personal. It shows that national optimism currently sits at 28%, having briefly climbed to 30% over the summer before settling back. Money and health now account for around a third of the factors people select as driving how hopeful they feel about their lives.
Laura believes that helps explain why even major changes in politics or big national events do not necessarily transform the way people feel for long. New Prime Minister Andy Burnham inherited a national optimism score of 24% when he entered No10 – lower than the 32% inherited by Keir Starmer, but more than double the 11% Liz Truss inherited.
Looking further back, Rishi Sunak saw the biggest improvement during his premiership, with optimism rising from 14% when he took office to 31% when he left. Starmer inherited a more hopeful nation on 32% but left with optimism at 27%, while Truss went from 11% to 10%. Boris Johnson saw the biggest decline, with optimism falling from an estimated 45% to just 9%.
Football, mood and spending
But it is not only politics that can temporarily move the national mood. England's World Cup run provided one of the clearest recent lifts. National optimism had fallen to an 18-month low of 21% in late May before recovering to 24% by mid-July as England progressed through the tournament.
Fewer than four in ten Brits (39%) expected England to go far at the start of June. Six weeks later that figure had almost doubled to 73%. The number believing the tournament would create national pride also jumped from 43% to 63%, while those expecting it to bring the country together rose from 48% to 65%.
But the optimism bump did not last. Laura said: “There's a difference between feeling good and feeling hopeful.
“Sunshine, football, a big tournament – they lift the mood for a few weeks. We saw it ourselves: optimism jumped from 21% to 24% as England went deep into the World Cup.
“But it faded, because a good summer doesn't change whether people feel their own life is getting better. Optimism needs evidence, not just a good mood.”
Defensive spending and holidays
That uncertainty is now feeding directly into the way people spend. Last year, households went into defensive mode, spending less, staying home more and building financial cushions in case something else went wrong. Some of those cushions are now beginning to be unpicked, but the instinct to remain cautious has not disappeared.
Even financially comfortable households can pull back when they do not strictly need to. Laura said they can read the news, absorb the wider mood and begin spending according to how precarious everything feels. She admitted: “I've caught myself doing exactly the same thing.”
Bigger purchases are also being delayed while smaller, more certain pleasures remain resilient. Almost one in three people not going away this summer (32%) say they are unsure they can afford it. Almost one in four (23%) say holidays have become too expensive, while the same proportion have other financial priorities. Another 18% would simply rather stay at home. Overall, 1.5 million fewer people took a main holiday this year than last.
Yet Brits have not stopped treating themselves altogether. Ice cream purchases are up 6% year-on-year, while cakes and fresh fruit are both up 5%. Laura believes the contrast shows why a small, guaranteed pleasure can currently feel more attractive than a big, uncertain commitment.
She said: “It comes down to how quickly I can size up the cost and the reward. A known cost with a known reward wins. An open-ended cost with an uncertain reward loses.”
She stresses that this is not an argument against cutting back. For most ordinary families, money remains tight and caution can be exactly the right response. Instead, Laura believes people should question where they are making those cuts.
She said: “Cutting the things you can see feels responsible, but it's rarely where the biggest saving is actually hiding.
“The visible cut buys peace of mind. It doesn't always buy financial safety.”
Her advice is to look beyond the easy, visible sacrifices and ask whether they are genuinely improving your finances – or simply providing the emotional reassurance of feeling more in control.
