Nothing justifies the statement ‘easier said than done’ more than saving money. At the beginning of the month, you outline how wisely you want to spend your income – but, in the end, you realise that you spent way more than you had planned.
Overspending is a habit that inhibits the saving efforts of most individuals. So, how can you overcome this problem?
Below are 8 ways to help you control your expenses…
Make a Budget
Tracking your expenses is the first step to overcoming overspending tendencies. When you have a budget, you see where most of your money is going. This, in turn, enables you to cut down on expenses that are not essential.
Naturally, many people like to track bigger expenses. However, it is the small and frequent expenses that consume large chunks of your income. For example, if you spend $5.00 on snacks daily, it translates to $150 monthly.
Know your Spending Triggers
Another way of reducing your overall expenditure is by knowing and avoiding your spending triggers. As the name suggests, spending triggers are conditions that cause you to spend. Some of the most common spending triggers include:
- Time of day: it is advisable to go shopping when you feel that your energy levels are at their peak. You are more likely to overspend if you go shopping when stressed and/or anxious.
- Surroundings: some people feel obliged to spend in certain environments, such as bars, malls, art galleries, and so on. Try to avoid such areas entirely, or carry limited amounts of money if you must visit such areas.
- Mood: as mentioned above, stress and anxiety are associated with overspending. Therefore, if you feel stressed, you could either exercise, rather than vent the anger using your money or credit card.
- Peer pressure: in group situations, if your friend’s have bad spending habits, this may rub off on you. However, remember, it is not wrong to tell your friends that you cannot afford something. Alternatively, you could propose activities that are pocket-friendly instead.
- Lifestyle: you might find it hard to abandon some practices that you are used to when you face financial hardships. To save money, you may be forced to give up some luxuries.
Avoid Credit Cards
Despite their convenience and better security, credit cards are one of the main causes of overspending. Often, you are unaware of the overall expenses incurred using your credit card.
On the contrary, cash is manageable because you can actually see the balance after every purchase. Instead of using cards, set aside some cash to use over a specified period. When you need to buy something, take a portion of the designated cash. This can help curb overspending habits.
Another disadvantage of credits cards is, well, credit. The ability to spend money you do not have results in the accumulation of debts (if you have debts you can learn how to get a relief as described in this article). Alternatively, using cash develops your resourcefulness.
Set Short-term Financial Goals
Essentially, short-term financial goals are incentives that motivate you to save money.
In addition to being attainable, these goals must be specific. For instance, it should be ‘I will save $1,000 over the next three months,’ rather than ‘I will save money this month.’ Also, these goals should be posted in a conspicuous location where you can constantly see them.
Buy Quality over Quantity
Although quality stuff might be expensive to buy initially, it usually makes up for it by guaranteeing a long life. This is particularly true with electronics, home appliances, furniture and other such items.
On the other hand, cheaper products tend to compromise on quality and longevity. Thus, they may be cost-effective at the time of purchase, but you will most probably replace them sooner and more frequently than the pricier options.
Simply put, you should choose quality over quantity because it is cheaper in the long run.
Do It Yourself (DIY)
The majority of domestic tasks do not require advanced skills. In fact, you can easily learn how to do a multitude of tasks by simply watching tutorials on YouTube and other sharing platforms.
Obviously, doing a task on your own will save money that would otherwise have been used to pay a plumber, painter, carpenter or any other professional. However, it is advisable to only perform tasks that you are comfortable with and to never compromise your safety to save a few bucks.
Monitor Your Progress
Since you have already decided to save, have a budget, and financial goals in place… The remaining component is to track your progress. The most obvious advantage of this is knowing how far off your goals you currently are!
In the current digital era, there are several tools that can assist you in monitoring your saving progress. These include Mint, You Need a Budget and Personal Capital; all of which offer a platform where you can merge and track all your assets and liabilities as well. If on a budget, you can use the spreadsheet application on your smartphone or home computer.
Set Up Automatic Savings
Nowadays, you can set up your bank account so that a certain amount is automatically deducted from your main account and transferred into a separate savings account. This enables you to control the urge of spending the extra money left in your account.
Generally speaking, the biggest enemy to your money-saving efforts is yourself. It all starts with you.
That being said, small changes to your spending behaviour can have a massive impact on your financial stability. Taking control of your finances is the first step to a more secure future especially when you retire.
Contrastingly, if you spend without limits, regardless of how much you earn, you will spend the majority of your life navigating from one financial storm to another.
Don’t wait – the time is now; your financial security in the future relies on the way you handle your current income!