Here's how you can stop overspending

Life Hacks
By Fay Ngina | 5 months ago
A man budgeting his expenses.

Spending money never gets old, and it is not necessarily a bad thing. However, overspending can take a toll on your budget, landing you in avoidable debts. Suppose you begin every month with the best intentions not to overspend according to your budget, but ultimately find yourself buying needless things justified by the 'a little won't hurt' attitude. In that case, you are most likely to be looking at an empty bank account by the end of the month. 

To curb overspending, you first have to admit that there is an issue when managing your finances, then take the measures required to take control of your money. Here are tips on how you can stop overspending. 

Make a budget

After getting your paycheck, the first step is to take a hard look at what you earn versus how you want to spend the money. Looking at how much you spend buying luxury items, clothes or electronics can be a major wake-up call for you. 

Calculate the amount of money you earn every month from salary or other sources of income
Prioritise your monthly bills, from rent to entertainment. Include savings in your budget. Try following the '50/30/20' rule, where 50 per cent of your monthly income goes to the necessary expenses, 30 per cent for entertainment and lifestyle preferences, and the other 20 per cent goes to savings or paying debts if any. Lastly, put your budget to the test and compare it to what you had initially planned. Make any adjustments if need be. 

Stick to using cash

Using cash automatically prevents you from buying unplanned items, especially online. Instead, try using a cash-only envelope system when budgeting for your stuff, as this enables you to stick to the plan. Gather a few envelopes for all your adjustable expenses and label them according to how much you have allocated. Alternatively, set aside your weekly budget in one envelope and draw out the amount you need every day. The goal is to look for a plan that will help you stick to the budget.

Know your spending triggers

Most people spend money without thinking about it. However, if you want to save money, knowing what your spending triggers are and why you have them can go a long way. Some of the things that trigger spending money include peer pressure from friends and family, current mood, or other factors that allow impulse buying, such as window shopping online. Keeping a diary is one of the best ways of tracking your spending triggers. It can help you gain control over overspending and limit how often you give in to the desire of impulse buying. 

Track your expenses

Even with the best intentions, most people find it challenging to stick to a budget. The truth is, an average person possibly thinks they know how they are using their money, but the reality is that most people cannot account for every penny spent every day. If you find yourself overspending despite having a budget, consider using a budget app to track where your money actually goes. Using a credit or debit card does not make it easier to track your expenses. To avoid overspending, do not save your credit card details on websites, as this makes checkout very easy. Also, leave your cards at home to limit the temptations of using them. However, if you do not want to go entirely card-free, give yourself some ground rules for using them.

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