Have you ever found yourself in a situation where you had every good intention to save money, however you failed before you even began? That’s ok, you are not the only one.
It has taken us some time, but through some ups and downs, we have learned the steps needed to stop overspending and even save a significant amount of cash.
For a short time in our relationship, I actually thought I was going to have to send my husband to some sort of “overspending anonymous” club due to his spending habits. I know, it sounds pretty drastic but it’s true.
I have always been pretty good with my finances, my husband not so much! He grew up differently than I did, his financial values were drastically different.
However, after 6 months of hard work and determination, we were able to turn some bad habits around and are now very content with our situation.
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If you are comfortable with your finances and aren’t riding the cusp of enrolling in “overspending anonymous” meetings, lucky you! However, if you have ever felt like you may be losing just a little bit of control, I am sure you will be able to learn something from our past experiences and how we avoid spending temptations.
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Table of Contents
Why Do People Overspend?
This is a very loaded question. I know. So many people live above their means and try to keep up with the “Joneses”. This can be very dangerous. There are many reasons why people fall into the habit of overspending. A couple of reasons are they haven’t created a budget, they use credit too often, and underestimate the little expenses that all of a sudden add up to huge dollar amounts.
If you are one of those people who feels that you can’t stop overspending. Have you taken some time to really think about the reasons why this is happening?
Are you experiencing emotional issues causing you to overspend? Sometimes when people are experiencing life’s stresses they think that they “deserve” something. They think that because they have been dealing with a stressor they are allowed a reward in the form of a purchase.
Are you addicted to spending money? I know, another big question. I am a strong believer in only buying the things you need. However, there are some people who feel the need to shop and spend excessively. Just because something is on sale it doesn’t mean that you have to buy it.
If you are able to recognize the early signs suggesting that you may be an overspender you can begin taking the steps to put a stop to this now.
Signs You Are Overspending
The reality is that some people aren’t able to recognize the signs that they have bad spending habits. For some, it could be denial or as mentioned above they may have a true addiction to spending money. For others, they may not know the correct steps to take to put a stop to their spending behaviors.
We have all made impulse purchases at one point in our lives. However, being able to recognize when these unnecessary purchases become routine is crucial. Keep track of your budget and don’t let your spending exceed your income.
If you are routinely maxing out your credit card, it’s time that we begin to make some changes. While living paycheck to paycheck never feels good and will be a challenge, slipping into debt only makes things worse.
Don’t let yourself get into a situation where you are unable to pay your bills, or save for your future. Overspending can happen easily and will wreak havoc on your finances.
The good news is, regardless of your situation you can change. You don’t have to continue living a life of financial uncertainty.
Understanding Your Spending Triggers
Have you ever thought that you can’t stop spending? Do you spend excessive amounts of money on your clothing budget? What about shopping online, does internet shopping monopolize your time? Or how about those late night infomercials, do you get caught up and spend money on useless products?
If any of these ring true, it’s time to get your finances under control. Because you are reading this I know you want to improve your finances and be a better you. Understanding your triggers and how to deal with them is key to creating a healthy financial situation.
You can take control by creating a budget, creating some financial goals, or possibly ditching the plastic altogether and sticking with cash only.
By taking control and recognizing what your triggers are you will begin to understand where your money is being spent and recognize if you are falling into your old habits again.
Tips To Avoid Overspending
Finances can be overwhelming but don’t let that get in the way of creating an action plan for yourself. Instead, use this as motivation to create some financial goals for yourself. By creating short and long-term goals you are giving yourself something to work towards.
Are you interested in saving for down payment on a house? What about putting money into your retirement account? Have you thought about putting money into an emergency fund? Having an emergency fund is a fantastic tool that everyone should have.
Having an emergency fund will keep your stress level down knowing you have a plan for the unknown and unforeseen hiccups that life inevitably throws at you.
By having actionable goals in place it will help you keep your priorities straight and may cause you to think twice about that unnecessary trip to your favorite department store or shopping online.
- Difference between a ROTH IRA and a Traditional IRA for early retirement
- How to save for an emergency fund
Create A Budget
Creating a budget is next up for helping you to stop overspending. I know this is probably not something you are wanting to hear right now but budgets really are essential for getting control of your finances. In fact, they are probably the best thing you can do to gain control.
Don’t worry, creating a budget doesn’t mean you can never have any fun anymore. You can create a budget that will allow you to do thing things you want while helping you to save and meet your goals.
By creating a budget you are essentially giving every dollar a job. What I mean by this is that every dollar that comes in and out of your account has a specific task. Budgets work better when your money goes exactly where you want it to go.
There are many budgets that are out there so find something that will work for you and commit to it. Consistency is key with a budget. If you want to start your own budget but don’t know where you should begin I recommend reading this, it’s an easy 8 step plan to get you started.
Use Cash To Avoid Overspending
If you have spent the time to create a budget and are a bit unsure if you will be able to stick to it. I recommend ditching the plastic and using cash only. There have been many studies that show people who use cash spend less money than those who are able to swipe their credit cards. By using cash you can begin to create awareness of the money you have.
Credit cards create a false sense of having money. People who are not familiar with credit cards tend to spend more money more often. This cycle can really put you at risk for falling behind.
I know that certain habits are hard to break. But if you invest some time in overcoming your obstacles you will feel much better. Begin by implementing one step at a time so you don’t become overwhelmed. Create realistic short-term and long-term goals. Budgeting can be fun with measurable and realistic goals. Post your goals and progress on the fridge as a daily reminder of how well you are doing. Good luck and be sure to let us know how you are doing.