Are you a chronic overspender who constantly wonders where all of your money has gone? Someone whose credit cards are always maxed out? Someone whose debts exceed your monthly income? Someone who always purchases things on impulse and feels remorse after looking at your bank account and seeing that you’re not building your savings?
Overspending can be the result of a variety of factors – family upbringing, emotional issues, or sometimes even a change in lifestyle. But whatever the case may be, it’s a dangerous habit that will only hurt your financial health. So how do you stop overspending?
A lot of people struggle when it comes to taking control of their finances. But to curb overspending, one must learn to be in control of their money instead of allowing their money to control them. If you finally want to learn how to stop overspending and start building your savings, you’re on the right page! Here are some tips to finally keep your spending in check and take control of your finances!
Determine what triggers your spending
One of the keys to stop overspending is to understand what triggers the habit. When these triggers are removed from the equation, it will be easier to stay away from the temptation and the urge to overspend.
Try to recall if there are certain days in the month when you find yourself going on an impulse-buying spree. Or are there certain environments that make you want to spend? Perhaps during the holidays? Or when you visit a certain mall or bazaar? How about your mood and emotional state? Do these things also serve as triggers to your irrational spending? Do you go on retail therapy to make you feel better when you’re down? Do you also feel pressured to spend when you go window shopping with friends or because they have bad spending habits?
As soon as you understand what triggers your overspending, you’re also able to pinpoint what you should steer clear of. This way, you can gradually take control of your finances before it ends up getting worse.
Keep track of your spending
Another reason we overspend is that we fail to track our spending. Purchases, no matter how small they are, accumulate and pile up. Before you know it, you have exceeded your monthly income.
Stay accountable for every dollar spent by tracking what you spend on a daily, weekly, and monthly basis. If you want to learn how to stop overspending, it’s imperative that you’re aware of where your money is going. Keep track of both the big and small expenditures. All of these can affect your budget.
Create a budget
A budget is a vital part of keeping one’s financial state healthy. It helps you keep your income and expenses on track so you can determine what you can afford and what you can’t.
Once you have a list of your monthly expenditures, the next step is to add up your sources of income. Take the sum of the fixed monthly expenses such as utilities, rent, car payments, etc. Then, create a list of the variable expenses – entertainment, groceries, gas, clothing etc.
Take a look at whether all your combined income can cover your expenses and if room can still be made for savings.
At least seeing it in black-and-white, you can start to analyze where you might cut back (even if only temporarily) on spending. You can also brainstorm how you might increase your income.
Use cash for purchases instead of credit cards
If you own a credit card and are trying to curb your spending, the best thing to do is to leave your card at home. Use it only for important and bigger purchases. Use cash when you dine out, buy groceries, and do other routine shopping. This will make you stop spending when your money runs out. When you have your credit card handy all the time, you may keep spending. Remember, credit cards aren’t an extension of your wallet.
Taking control of your money is easier said than done but it’s definitely possible. If you want to reform your spending habits and learn how to stop overspending, these tips should come in handy!
Start working toward financial freedom by building your savings with us! Contact Calcite Credit Union for more information.