Have you ever started a month thinking about saving money this time and not spending on things that are not absolutely necessary? Did you realize at the end of the month when you became broke that you have failed? Does this cycle repeat every time? If your answer is yes, then we regret to inform you that you have been diagnosed with splurging. It happens to almost all of us and it is even okay sometimes. But if you continue like this every month, you will not be able to have any savings. So, how can you overcome the urge to splurge?
There are many reasons why we overspend, maybe we do not know our spending habits, maybe we do not think clearly while making a purchase or maybe we think that this is the last time we are doing this. So, how do you really stop? We have collected some tips and tricks that will help you stop overspending your hard-earned money and instill in you the habit of saving for the future. Read on before you get your credit next month so that you do not have to go through the same cycle again:
1. Track Your Spendings:
Keeping a record of your daily purchases no matter how little you think they are is important. Total the amount you spent in a week can help you figure out your spending patterns. It will help you see where you spend the most and on which item you spend most. Seeing the total will definitely humble you down and you will have more focus on cutting down your purchases. Our little daily purchases can add up to a lot, maybe your morning coffee cost $3 but when you total the amount for the whole month you will realize how much you can save if you cut down on it. Buying everyday things like magazines, lunches, or even getting a manicure can make a big dent in your wallet.
2. Understand Your Spending Triggers:
Some people have the habit of spending more when they feel stressed or sad, while others love to shop when they are happy. Understanding which mood, emotion, or environment triggers your urge to splurge can help you break the cycle. Impulsive shopping sprees can be due to your emotional or psychological state or due to external factors like the environment or peer pressure. Maybe you feel more obliged to spend when you are in a mall that has all your favorite brand outlets or maybe you overspend more when you are out with certain friends. You can try replacing the urge with something different, such as if you are feeling stressed you can try working out for a change or if you are going out with friends that you spent the most with, make plans for somewhere where there are no shops you can spend on like a park or at home. If you identify the triggers then you will be able to remove them and break free from the temptation.
3. Stick to Cash:
One of the best ways to cut down on your spending is to stop carrying around your credit card everywhere you go. We over overspent when we have a credit card due to its high limit, whereas the cash we are carrying can easily be finished. So, the next time you are going to a mall to buy something you absolutely need or going for groceries, carry the amount of cash you anticipate the purchases will cost and leave your credit card at home. Even if you will like something and have the urge to buy it, you will not be able to because you will not have enough money for it. You can also delete your card details saved on your browser which will help you stop making impulsive buying decisions. Finding your card and then inputting all the information again will give you time to think through if you really need this purchase and help you see things more clearly.
4. Make a Budget:
You would have heard this one a lot but we assure you it works. Making a budget will help you see how much money is required to pay off the necessary expenses like rent, bills, and taxes so that you do not start spending all of your paycheques. Allocating a certain amount of money to everything will help you stick to that amount. You can have a budget for eating out, shopping and entertainment so that you know the limit of spending. Make sure you transfer a certain amount to your savings account. After you make a budget compare all the purchases you have made in that month to see how much you exceeded. Then you can plan your next month’s spending accordingly.
5. Use the 5-Need and 30-Days Rule:
We think we need something after watching a video of it or seeing somebody else using it, such as a kitchen gadget but in reality, we do not need it. The best way to figure out if that purchase is really justified is to note down the times you thought to yourself “I need this” when you are in the kitchen working. If you have thought about it 5 times then you can purchase it as it might be necessary. Another rule is the 30-days rule, if you think you really need something wait for 30 days and see if you still want it or have forgotten about it. If you still think it is necessary after 30 days then you can make that purchase.
Remember to stick to your budgeting goals and then if you can achieve them, you can reward yourself by spending a little but make sure you do not overspend. If you really want to buy something, check if the store has any upcoming sales and then wait for them to buy the same item at a lesser price. Treating yourself sometimes is okay as long as you think smartly. Try spending on things that will last you a long time or spend on experiences rather than materialistic items. Experiencing different things will provide you with lifetime memories and you will most probably never forget them.