How to stop wasting money as my spending is out of control
Let’s admit; we all love money. Money can bring us glory and riches. It is the primary reason why we work hard. Money is good. Money can solve almost all the riddles of life. It can change our fortune to an extent that we can live lavishly without carrying a baggage. But the million dollar question is to what extent would you spend your money to live a good life? And most importantly, what are the major signals of money spending?
What are the usual signs of money wastage?
Wasting money is only good when you are ultra rich. But when you know your income is limited, you have to set a budget to live modestly. This can help you save a lot of money for the future.
Spending money is all right when it is according to the budget set by the debtor. But once the spending habit falls out of proportion, then it leads to money madness. In such a case, you ought to know where are you going wrong. Follow these situations:
1. Your budget doesn’t sum up
It is your responsibility to have a personal budget. But do you honestly follow it? If your clothes are budgeted at $200 but you spend an extra $150, then it could affect your daily expenses like daily utilities, groceries, or your retirement savings.
2. Your monthly income is exceeded by credit card debts
Suppose your earning potential is about $4000, but there’s already a credit card debt of $12,000, then it means that you are spending too much. Always remember that your monthly income should be much higher so that you can make such payments in full swing along with managing other debts (if any) and other financial responsibilities.
3. Your expenses outweigh your income
Everyone has a day to day expenses to meet and he/she may as well be spending more than their earning potential. So, an increase in lifestyle oriented expenses can further put you more in debt.
4. Your credit limit is crossed
Reaching the maximum limit of your credit card means not only you are leading an unsustainable lifestyle, but also you’re using additional resources to increase the overspending. It also means you are accruing interest and possibly incurring expensive fees for hitting the max. When the spending is no longer about what is there in your wallet, but how much you can get your hands on to continue buying, it’s time to make a change.
How to avoid wasting money and take charge of yourself
Our nation loves to splurge. And it cannot be denied that we spend our hard-earned money in lots of useless stuff, so much so that the usual priorities of life take a back-seat. It could almost impact your future relationships. If overspending can put you in huge debt, then it is definitely a sign of concern.
So, it’s time you start worrying about how to save money and bring your life in proper shape. Here are the ways in which you can take the inspiration to save money and stop overspending.
a. Do inventory checking at home before buying anything
It usually happens that we develop spending habits to such an extent that we tend to buy unnecessary items that we already have at our home. This not only applies to clothing and accessories, but also for tools, household products, and knick-knacks. Therefore, it is advisable to do an inventory check of all the items before you go out to swipe your card for shopping.
b. Set short-term financial goals
Setting short-term goals is a good way to stay focused as well as alter your spending habits. Having such goals will remind you of the reason for cutting back on expenses and making a few sacrifices.
Some short-term goals that you can set aside for yourself include, saving 5% of the income for future goals, investing in stocks, and decreasing your spendings to meet further financial goals.
c. Buy good quality items
It is common for people to almost never use the things they buy. It implies clothing for sure. Instead of purchasing pricey things, go for affordable budget-friendly shopping stuff. The negative part of buying expensive items is that it can give you less satisfaction, and that lack of satisfaction may lead to false hope that buying a new item will make us happier. Go for smart shopping which will give longevity to the item you purchase and that you can utilize from time to time for your benefit.
d. Resist your temptation
We all prefer to take a word of advice from our trustworthy friends and family members before making a deal. It is the temptation that compels us to try something new that may be out of our budget plans. Once you hear about any such product that catches your attention, you may go out at all odds to buy it. This can also put you in a situation where you ought to take out a small amount of loan to purchase the desired product. Worse, you are likely to experience that the product may be worn down over time, putting you in a guilt-ridden position. This is exactly when the temptation can work against you. If you pay a little more attention to saving money and becoming patient with time, you can also purchase the product of your choice and enjoy it fully.
e. Don’t pay more than what you earn
Suppose, your income is $3000 and your spending is more than that, then you should better watch your habits. This way you can fall into debt and it can make your financial life difficult. So, spend as per your earning potential.
f. Focus on covering your day-to-day expenses
It matters how you are spending on day to day basis, especially if you fall under the group of low-income people. You know you have lots of responsibilities, from paying your monthly bills to paying for rent, food, electricity. Buying healthy food items are necessary for the health; so stock up on non-perishable food at the beginning, and set aside an amount to buy fresh fruits, dairy products, and vegetables.
g. Shop smartly
You can shop smartly to avoid spending excessively. Cut down on unnecessary purchases, buy user-friendly things, and plan a budget that does not let you shop carelessly.
h. Avoid falling into debt
It is somewhat true that using credit card promotes overshopping. Since it is quick and easy, you may get into the habit of making impulsive shopping. With the “buy now, pay later” concept, you can empty your account for the next month as well as for this month. Clearing the credit card debt can have lots of benefits. It means ditching your credit card and improving the credit rating, which can impact the future access to credit.
i. Watch your spending
Make a note of your spending plan and try following it. If you have a tendency to spend more than what’s prescribed in your plan, then kindly make a mental note of it. A written note is even better. For non-essential spendings, set a limit for using money as a tool of expenditure. Keep all your receipts. It is going to be helpful while tracking your spending. If you observe that you have spent more than what’s required, better is to return it.
j. Don’t get blinded by discounts
Stores know the mindset of shopaholics. They exactly know that a potential buyer would get carried away by discount offers. When you purchase a product at a discounted rate, you may seem like it is easy on your pocket, but actually, it isn’t.
So each time you get lured by the bargains, ask yourself “Do I really need it?” Only if the answer is yes to both, then only consider buying it.
As an informed consumer with an independent mindset, it is your responsibility to spend money wisely. Careless use or wastage of money can have serious consequences on your life. So, it is essential to keep a track of your spending. In this way, you can easily manage your financial activities and can achieve better results in the future. Most importantly, always remember that you are in control of your life when your finances seem to be in place so that you can enjoy your wealth wisely.