If you’re like me, then you are usually bad at keeping your finances in check. Well, financial experts say that a budget-conscious person should put 15% away in savings and 10% toward retirement. But how many people do this and still barely make ends meet? I have several friends who earn $50,000 a year, yet they work two jobs and barely keep up with their finances.
It’s evident that such individuals do not track their spending or follow a budget. The sad part is that most people don’t know how much they spend each month on groceries, transportation, and entertainment. I avoid similar problems by taking time and patience to track my daily purchases. Here are more tips I use to avoid overspending money.
My biggest money mistake was not having a budget and sticking to it. I had no idea how much I spent until I started keeping track. That was easy to do. I wrote every penny I had out for one week to see where the money goes. I was shocked!
A budget makes it possible to remain in control of my spending and avoid making purchases that I don’t need and can’t afford. I made a list of my monthly spending and set a monthly limit for each thing that was over budget, like groceries and entertainment. I now stay within my budget on most items, so I am saving the most.
There is a magical place in every cash-strapped shopper’s mind that thinks everything is on sale or shops offer generous discounts. This place leads to overspending. I can’t recollect the number of times I have glanced at a price tag and thought, ‘Is that really what I’m paying for?’
My most significant spending and saving mistake is buying something that isn’t on sale or the marked price. It’s not because I’m not looking for a deal, but sometimes because it’s easy to get caught up in the moment without realizing later what I was spending my money on.
I try to shop using cash only, especially at the grocery store. It’s a game-changer, as a lot of studies have shown. Using cash makes me more aware of how much I am spending. Contrary, when I pay with credit cards or bank accounts, I tend to spend more than my actual budget allows me.
It’s always advisable to resist impulse buying. Never purchase things for instant gratification, or for the sake of appealing to friends. If I find that I like many things, instead of buying something new, I take photos, then six months later, if I still like it, I buy it!
Most of us are not always that efficient at saving money. We all overspend because we have let our wishes get ahead of our needs. So, I sat down and made my list of wants and needs. I had to sit down and think about it. Come to find out, making lists and being able to cross things off is a fabulous way to feel accomplished! The lists should be numbered according to priority. At the top, we should purchase the basic needs, while at the bottom, things we can do without in our lives.
My Final Thoughts
Overspending is not about the occasional indulgence. It is more about a poor spending habit with a snowball effect that grows worse with each passing day. There’s no need for deprivation or living on a shoestring budget. It is possible to train our minds and change our spending behavior for the better, who knows what you might be able to afford in the future!