Michael D'Angelo- November 2019
Spending can quickly get out of hand if you don’t have a budget and you have the “I want” syndrome. You start with good intentions, but before you know it, you’ve spent money that was meant for saving, or something else. What happened? In order to get to the root of the problem and address overspending issues, there are a few things you must do:
Understand Why You Spend & Find Your Triggers
You can’t stop your overspending habits if you don’t know why you do it. For most individuals, there are psychological and emotional issues behind this bad habit. Knowing what triggers you to spend can help you avoid certain situations. For instance, perhaps certain environments cause you to overspend. If you love going to the mall and that propels you to spend, stay away from it. Or, if you’re an online shopper, block those sites that you frequently visit and remove all financial information so you can’t easily slip up.
You may also spend depending on your mood. If you’re having a bad day, do you reach for your wallet, or invite friends to go out for drinks? Think about your lifestyle. Do you feel like you need to have the latest clothing or shoes to make a statement? The psychological reasons behind your overspending are worth exploring. Once you understand the deeper reasons behind your overspending, you will be able to take steps to rectify this problem.
Tracking What You Spend
One of the best ways to identify what you are spending is to track all your expenses. Track every single dollar you spend. Lunches, coffee… everything. Once you can see it, it can help put things into perspective.
Set Some Financial Goals
Setting financial goals and working toward them will not only give you a sense of achievement, but will give you a purpose for your money that goes beyond spending. Instead of going out for meals frequently, why not try avoiding your usual dining routine and once a month reward yourself with that higher-end restaurant you’ve always wanted to go to. This goal may be hard to accomplish if you’re used to spending, but think about the rewards and sense of pride you’ll have if you complete the goal. Little steps make big differences in the long run.
The “B” word. If you plan on attacking your bad spending habits, you must create a budget. This means you have to list all your sources of income and all your expenses. Once you get that out of the way, it’s time to take a look at what you spend your money on outside of your fixed expenses and start making some adjustments. If you use your card a lot, looking at your bank statement will help identify spending as well. Ultimately, you want to change those unnecessary expenses into opportunities for saving or paying off debt.
Make Your Money Work For You
You have a job that pays you money, but is your money working for you? It’s time to look at your money differently and assign it a job. Every dollar you earn should have a purpose. Don’t just let it sit there. If it’s meant for savings, put it in the savings account. If you need to put money aside for retirement, do it immediately and get invested. By making your money work for you, it will help you avoid the urge to spend it.
Although it may be difficult to curb overspending habits, it is possible. Once you start seeing the results of your discipline, you’ll feel better about saving and it will become easier to keep going.