Do you want to stop overspending but at the end of the month, you find that you’ve spent more than what you earned?
Well, if you have experienced this phenomenon, then you’re not alone.
Many people try hard to quit spending money more than what they earn.
However, it’s not that difficult.
Here’s how you can not only stop spending more than what you earn but also save a significant amount every month.
1 Believe in yourself that you can do it
If you do not believe in what you do, you can never achieve that.
So, at first, believe that you can stop your overspending habit.
When you become demotivated and feel like spending, listen to these stories and that will help.
2 Know what triggers your spending habit
You have to identify certain psychological and emotional triggers that lead you to spend more. By being extra cautious about these triggers, you can omit the opportunity as well as the temptation to overspend.
Find out which triggers you the most:
- Mood - Identify what mood makes you spend more. You can write down when you’re spending and analyze your mood at that time.
- Specific time - Does being stressed out make you spend more? Ask yourself!
- Certain lifestyle - If you follow a certain lifestyle, you want to maintain it.
- Particular environment - Certain environments like shopping malls and craft fairs can make your overspend.
- Peer pressure - This is one of the most common triggers; you tend to spend more when you’re hanging out with friends. If a friend has overspending habit, it also influences you to spend more.
Your job will be half done and you’ll be able to avoid these triggers if you honestly do this activity.
Know about these in details - How you can avoid these triggers to control your spending
Ask yourself these questions if you tend to spend more:
- Can you bring coffee from your home instead of visiting Starbucks while going to the office?
- Do you eat out very often? Can you have home-cooked food?
- Can you plan your activities so that you have to drive less?
- Do you think you’re paying unnecessary fees to the gym when you don’t go regularly?
- Are you paying more for bundle offer of cable, telephone, and internet?
- Do you think your utility bills are much higher?
- Do you feel that you don’t have to save for the future?
3 Plan a budget, a realistic one
Budget! Budget! Budget! The only thing that can curb your overspending nature.
Planning just a budget won’t help you much.
To do so, take into account all your sources of income and your spending to each cent. Now, at first keep aside an amount say about 20% for your savings, 50% for meeting daily necessities and just 30% for your personal use.
Allocate a certain amount for each item on your spending list. With time, you’ll be able to plan a suitable budget.
You may not be able to follow the budget 100% in the first month. But, never mind. With time and suitable modifications to your budget, you’ll achieve your goal.
4 Keep a close track on your spending
Every day, at night, analyze on what items you’ve spent money, and think whether or not it’s worth.
This exercise will help you save a decent amount.
Just make sure you track your expenses, however small it may seem to be. Keep a detailed note for every cent.
Just ensure that you won’t use the money, designated for one item, for purchasing anything else.
5 Say ‘No’ to yourself and others
Often we hesitate to say ‘No’ to others, but it’s required. More important is to say ‘No’ to yourself.
Whenever you purchase any big item, an item not on your list, or spend from your 30% allocated amount to yourself, make sure you ask yourself whether or not it’s worth. If required, take 1-2 days time and decide whether you still need it.
Most times, you’ll be able to avoid unnecessary expense.
It will become a practice once you start doing it.
6 Open an account in a bank that offers good terms and conditions
If you think your bank is not treating you well, change your bank or open an account in a bank that offers suitable terms and perks.
A bank may offer interest on your checking account and eliminate fees for ATM use.
Moreover, a credit card with good cash back offers, especially annually, will help you tackle your holiday expenses effortlessly.
7 Stick to cash as much as possible
If I say that stop using credit cards, you can ask what about credit score! Won’t it affect your credit if you stop using credit cards?
From the third month, make a promise to swipe your cards for purchasing things on your list and as per your budget.
And, most importantly, repay the entire balance at every billing cycle to avoid experiencing debt problems; otherwise you may have to struggle to get out of debt.
So, are these tips useful?