If you’re reading this article, chances are you already know that you have a problem. Overspending is very common. Many people love to shop. Unfortunately, shopping isn’t a good hobby to have (especially if it's not in your budget). It’s the type of hobby that doesn’t leave you fulfilled and leaves you broke. Let’s look at how to get your spending under control.
Track Your Expenses
Do you know where your money goes? The truth is you might be surprised. Spend two months tracking every cent you spend. You want to make sure you’re writing down everything, even the small items like a pack of gum. At the end of each month, look over where your money went. This is usually very eye-opening and tells you exactly where you need to cut back.
Create a Budget
Once you’ve tracked your expenses, sit down and create a budget. You want to focus on the most important things first, such as rent/mortgage, groceries, utilities, car payment, etc. These items must be accounted for in your budget. If you find that you barely have any money left over after these main expenses, you may need to rethink where you’re living, the car you’re driving, etc. If you have money left over after these expenses, use it wisely. Put as much as you can towards debt, but also leave room for yourself.
Even though you’re working to cut back, you want to pay yourself. This small amount that you allow for yourself (usually 10-20% of your income) will give you a sense of freedom. A huge mistake people make is to focus all their money towards bills and living expenses. If you don’t pay yourself, you will not stick to a budget.
Avoid Spending Triggers
We all have triggers that cause us to overspend. For example, you may find yourself overspending when you go to a certain store. If that’s the case, limit how often you go there. If you have a problem with catalogs, contact the company and ask to be removed from their mailing list.
A huge trigger for many people are emails. Who can resist 50% off? Take the time each day to go through your email and unsubscribe from companies trying to sell you something. Not only will this cut down on the amount of email you receive, but it will greatly cut down on the amount of money spent.
Use the Envelope System
Last, but not least, use the envelope system. The envelope system forces you to rely on the amount of money in an envelope rather than reaching for your debit or credit cards. This will make you more aware of the cost of items going into your cart and will force you to work within that budget.
Overspending is very common, but it doesn’t have to be. There are so many things you can do to get your spending under control.