We all face this problem. Seems like no matter how hard we try, we can’t get over it. If you’re experiencing overspending issues, know that you’re not alone. Being having this same issue myself and I can’t seem to get my desires under control. In an attempt to solve this problem, I stumbled across some tips that would be really helpful to a lot of people so I decided to share them here with everyone.
Bad spending habits can be really hard to break. One moment you have a lot of money in your bank account, and a few days later you look at that same account and wonder “where did all my money go?” despite all the efforts you made to try to watch how you spend – I know I’ve been there. In a moment, I’ll be sharing how I’ve learned to deal with overspending, so, read on if you’d like to learn to keep your spending in check.
Just so you know, we tend to look at overspending from a single perspective. Take, for instance, you plan to spend only $200 on shopping a month but end up spending $530 instead. If you can cut back on spending in other categories on your budget so that the extra $330 is fully covered for, then you’re not overspending.
If you can not cut back on spending in other categories on your budget after spending $530 on shopping instead of $200, then, you’ve got an overspending problem that needs immediate attention. The tips I’ve offered below should help you get started on getting it under control.
1. Learn How to Create a Spending Plan
Just like you make plans in other areas of your life, you need to also make plans for your money. Doing this makes you conscious of your financial state. You get to know where your money is coming from, and where it is going to. Having this financial consciousness in you will help you make smarter financial choices.
To get started, make a list of all your income sources. Move on to sum up all your fixed expenses – your rent, debts, and so on. These values are fixed, and they’ll make it easier to create your budget. Next, make a list of all your variable expenses – gas, groceries, and so on. These are the variables you will use to create your monthly budget. Where you know you’re spending way too much, allocate lesser fund to the category.
Test run your budget and make reasonable adjustments as time goes by, and be sure to stick to it.
2. Go Out with Only the Cash You’re Planning to Spend
This should be decided according to your budget. Go out with only the cash you’re planning to spend. Let us look at a scenario. So, you’re planning to go out and have dinner. The first thing to do is to check your budget to see how much you’ve budgeted for that kind of expenses.
In this scenario, let us assume $70. Go out with only that amount – $70, and in cash. If you’re just starting out, be sure to leave your debit and credit cards at home. Later on, when you get used to sticking to your budget, whether or not you go out with your cards, it wouldn’t matter because you will not spend more than you’ve allocated on any expenses.
It’s normal to think “What if I need extra money?” My answer to this is that you try as much as possible to spend less than the $70 you’ve allocated for the dinner. This way, if any extra expenses pop out, you’ll be able to handle it. Remember that you don’t have your debit and credit cards with you, so, you will have to plan that dinner carefully.
3. Never Shop Without a List
Create a shopping list whenever you need to go to the grocery store and stick to it. This would help you stay focused on what you really need because it would be easy to go crazy and overspend money when you shop without one.
After creating your list, go over it and double check each of the items you’ve written to be sure you really will be needing them. This will help you avoid impulse purchases. You will only spend money on what you really need.
4. Make Sure You Can Account for Every Penny
Watch every purchase you make closely. Make sure you’re able to account for every penny you spend. Don’t ignore those small daily purchases you make, because, they are just as important as the bigger expenses.
The tiniest expense, if not tracked, can ruin you over time. Cutting down $2 every day on your morning latte will add up to $60 in a months’ time. Once you’re able to account for where your money goes, you will be able to make smarter spending choices.
5. Try the $2 Reward System
Here is the way this system works. Every time you successfully resist yourself from overspending where you would have in the past, reward yourself with $2. Find a secured place to keep the money – in a jar, your cloth box…anywhere you know the money will be safe. On a bi-weekly basis, use the money to give yourself a nice treat – spend it on whatever you want.
Doing this adds to the fun of it, and you will have something to look forward to when you know that, you will be rewarded for trying to resist spending too much wherever you find yourself – the good part being that, you get to spend the reward on whatever you want.
We all experience bad spending habits that break our monthly budgets once in a while. The best thing is to learn how to stop over spending. Honestly, it is hard, but possible if you put your mind to it. With time and dedication, you will be reformed. Don’t be too hard on yourself when you’re just starting out. Start by learning to budget and setting spending limits. Set financial goals regularly, and in no time, you will have learned to spend money wisely.