Tips to Help you Get Your Spending Under Control
It’s very easy to spend too much money. There are temptations all over the place and credit cards, apps, and online shopping have made it easier than ever to spend money. However, if you spend too much, you could put yourself in a serious debt problem. In fact, even if you manage to avoid significant debt, out of control spending can still hurt you. If you’re not careful, you could find yourself spending a lot of your money on things you don’t really need, leaving you with less money to achieve the financial goals that are important to you (such as saving for a vacation, an education, your retirement, or whatever other goals you have).
Here are some tips that will help you take control of your spending.
Learn Where Your Money is Going
One of the most important things you can do when you’re trying to get your spending under control is to learn where your money is going. Many people get to the end of the month and realize they have no money, but they’re not quite sure where it all went. It’s very easy to overspend if you’re not keeping track.
If possible, go back through your bank statements and credit card statements and try to figure out where you spent your money over the last few months. If this doesn’t prove possible, commit to tracking your spending going forward. You can use an app on your phone, a spreadsheet on your computer, a pen and paper, or any other method that works for you. Make sure you write down every dollar you spend (because several little purchases can add up) and try to write purchases down shortly after you spend the money, so you don’t forget anything.
You only have so much money, and spending it on one thing means you won’t have as much to spend somewhere else. This means you’ll need to identify your priorities. Doing so will help you keep your spending in control. For instance, if you’re in a situation where you want to save up $5000 so that you can take a vacation, recognize that this goal is important to you. If saving for a vacation is a priority, teach yourself that every dollar you spend on discretionary expenses takes money away from this goal. Would you rather spend $100 on a new jacket or put that money towards your vacation?
Create a Budget
If you don’t have a budget, make one. Sticking to a budget will make it significantly easier to rein in your spending. If you do have a budget, but you’re finding it difficult to stick to it, consider adjusting it. You might need to make cuts in certain sections so that you can afford all of your expenses and still have some money for savings.
Pay with Cash
Credit cards (and even debit cards) make it very easy to overspend. If you’re having trouble sticking to your budget, consider spending cash instead. Every month (or every two weeks, whatever is easier for you) take out enough cash to cover your expenses. Divide it up using your budget and then only spend what you have in cash. If you don’t have any cash on you, you can’t buy anything.
If you’re living on an all-cash diet, it’s a good idea to leave your credit cards at home. You may also want to delete any saved payment information that you have on online shopping sites.
Think Purchases Through
Before you buy something, take the time to think it through. Walk away from the item and really consider it. Does it fit into your budget? If you buy this item, what will you have to give up so that you can still meet your financial goals? Go home and think about the potential purchase. Tell yourself that you’ll think about it overnight, or for a week or a month (whatever suits you) and, if that time period passes and you still think the purchase is a good idea, then you’ll buy it. When you wait and give yourself time to think, you’ll find that you spend less and make fewer unnecessary purchases.
Shop with a List
Never shop without a list. Whether you’re going grocery shopping, holiday shopping, or shopping for clothes, write down what you’re looking for before you head out, calculate the cost of the items on your list, and commit to only buying what you’ve written down. Impulse purchases are almost always unnecessary and these costs certainly add up.