Excessive spending, we all have done it at some point or another. You can easily get side tracked with your spending. I have been there done that, you think all is well until you see your credit card bills or bank statements. Surely, some one must be spending your money. It cannot be you. Your spending is believe it or not a habit. It is some thing you have done since you were a child. Spending habits develop over time without your knowledge.
Spending habits can be positive or negative. They can be excessive or just right depending on the person. My spending habits sound wild to some of my family members. I spend on food and things that bring me joy more than most of my family combined. To me this is not a bad thing.
Some of my friends spend on designer bags and weekly shopping, this may not also be a bad thing. Here is the thing, if it is within reason, planned and brings you joy do it ! Here is the catch though, if you are spending on things/categories you are shocked about at the end of the month. Then you need to reevaluate your spending habits.
How to know if your spending habits are getting out of hand ?
Here is how, BUDGET!. There is a reason why most people don’t like budgeting. Its boring (I definitely agree with you) and it feels like it takes forever (it doesn’t take that long). Even though you might hate doing them, budgets are necessary. They help you understand where your money is going. How you can save, whether you have an income or an expense problem.
Like this post ? Also read: How much money is enough ? or 5 Easy Ways to $1 Million Net Worth
A budget also help you understand your spending habits. It shows you where your money psychology is weakest. If you have several grocery shopping’s in a month, impulsively shop online, eat out too much or take too many Uber rides.
Tips & Tricks
- Always create & use a budget -A budget is not as constricting as most people make them out to be. They only show what you earn and what you can spend. Emphasis on “you” here, these limits are set by you so, don’t make your budget so constricting. Be realistic and practical. Do not set your restaurant spending to zero when you have eaten out 10 times the prior month. Start reducing your spending slowly. Maybe go for cheaper 8 restaurants.
Once you have created a budget, filled in your prior months expenses. Analyze your spending, pick out 20 items you spent on that either did not make you happy, were impulsive or you could have forgone. Add those up. These are the items you need to focus on. Next month do the same until you are satisfied with your spending habits.
2. Focus on your weakness – this is part of being human. We all have weaknesses. Some of us prefer convince and are willing to pay triple for it others want the designer bags and brands. What are your weaknesses ? Find trick that work on minimizing your weaknesses.
Here are some tricks:
Online shopping
- delete your credit card information from mobile pay and saved websites
- do not use your regular email for store account. Sales emails are a big trigger. They tell us what we do not need.
- block app notifications from stores. They are distracting and you always end up buying something because its so easy.
- take a break from amazon prime. skip a month, see how much you save. You will have time to think about the items in your cart until you reach the minimum order of $35.
In-person shopping
- plan your purchases. Make a list of the items you need. Anything from small purchases to your grocery list.
- limit your shopping trips. The less times you go the less you will spend
- go window shopping without your wallet. You would be surprised how much you don’t need something when you have time to think it over.
subscription & recurring services
- audit your subscriptions. Every 6 months run through your subscriptions list and cancel the ones you have not been using. Try rocket money to easily cancel your subscriptions.
- shop around for insurance rates every year.
Once you have built a good spending habit and started saving money, learn to invest. Let your money work for you. Vanguard is a great place to start your investing journey. They have low expense funds.
