4 Tips To Stop Overspending
It is never too late to start trying to inculcate positive habits that will make life easier for you in the long term. Overspending serves as one of the top reasons why you may often find yourself broke before the month ends, without scope to actually save any of your money. The first step to achieving your financial goals is to take control of your impulses when you recognize your pattern of going off track. Intent and conviction are the key values to keeping yourself focused on your goals. While spending your hard earned money is not necessarily a bad thing, you should also make equal efforts to save money every chance you get. Read this blog for inspiration on the ways in which you can address your habit of overspending and prevent setbacks in ensuring a secure financial future.
Identify your spending triggers
The first step to getting your finances in control and preventing overspending is to stop and understand the ‘why’ of your overspending. There are several factors that may trigger your overspending impulses, including your mood, peer pressure, as well as ambient factors. When going through a taxing phase of life, it is common to try and feel better by indulging in self care and buying things for yourself. This expenditure may not have been factored into your monthly plans.
Do a no-spend challenge
The reality is that you could probably go a long time without needing to buy anything at all besides the food and rent of your house. To break yourself of mindless, needless, or even reckless spending, do a no-spend month (or week, or weeks). The savings can be dramatic, and the change to your mindset monumentally. This exercise can literally change your life forever — and it will if you let it. Or if that seems too extreme, start with a no-spend week.
Make a budget and stick to it
Overspending becomes a habit when you’re not used to tracking your income and expenses. But you can combat this by setting a budget. The first thing someone needs to do when setting out to reduce overspending is to set up a budget. Without a budget, there is no way to know how much money is being spent each month. A comprehensive and practical budget helps you stop overspending because it puts all your purchases in the context of your income and broader financial picture. Don’t think in terms of rupees when making a purchase. Think in terms of hours of work: A Rs 1,500 trip to a restaurant may not sound like much until you realize it takes five hours of work to pay for it.
Reduce spending — Need vs Want
If you are really serious about taking control of your overspending, the first step is the most obvious one, you reduce spending. In handling your personal finance more responsibly, understanding the difference between wants and needs is of the essence. You may want new boots, but do you need them. Reducing your spending can also be achieved by evaluating your other bills. Can you get a better rate on your auto insurance? Has your cable bill gone up again? How about dropping cable and going with cable tv alternatives? Evaluate and negotiate with the accounts you already have. Check your online checking account to see if you are being charged for something you no longer use.
Keep your inbox clean
Consider clearing out the emails that hit your inbox on a daily basis. Brands for which you have signed up to receive daily updates, latest promotions and deals may be contributing to your overspending by perpetuating your tendency to spend. This may make you spend a lot of money on things you did not need in the first place simply because they are on sale. It is important to keep yourself unsubscribed from retailer emails in order for them to not lead you to make impulse purchases. You can even request stores to remove you from their mailing lists. Think the same thing for your credit habits and avoid being bombarded with credit card offers.