If you constantly seem to have a problem with debts and overspending, you’re not alone. It seems like most of us spend more than they earn on a regular basis, using credit cards and loans to make ends meet. If you’re one of those people living paycheck to paycheck, even though you may earn a decent income, it might be time to think carefully about your spending habits, and what you can do to improve them.
Sometimes, the issue is simply that you have more bills than you can handle. However, in other cases, the problem might be that you’re overspending when you don’t need to be. While putting an end to overspending isn’t always easy, there are some things you can do.
1. Eliminate Problem Areas Fast
One of the common reasons that so many people struggle with overspending is that it’s so easy for us to spend without realising it these days. Putting a payment on your credit card instead of your debit card is unlikely to be something you think twice about. What’s more, online spending means that you can buy the items you want with nothing more than a click of a button.
One of the best ways to reduce your risk of overspending in this new environment is to look for areas where you may struggle the most. For instance, if you’re constantly suffering from credit card debt, you can put your cards away in a drawer for a while and use nothing but cash instead.
2. Compare your Options
Have you ever accepted the terms on a loan, even if you weren’t 100% happy with them, simply because you needed to get your hands on some extra money fast? When you’re worried about paying for something important, it’s easy to think that all loans and credit products are the same. However, the truth is that spending a little time to compare your options before you commit to anything could save you some serious cash in the long term.
Before you agree to a loan, make sure that you look at all the different products available in your area, and how much they’ll cost you in terms of interest and APR. You may even find that certain loans come with special gifts and benefits that you can’t get anywhere else.
3. Prevent Impulse Purchases
Impulse purchases are another major issue for many of today’s consumers. Not only do we have no problem buying something that we didn’t plan to purchase at the beginning of the day, but we’re masters at convincing ourselves that the purchase didn’t mean anything. How often have you told yourself that buying an extra coffee doesn’t count because it only cost a couple of pounds?
Remember, those little purchases really add up. Keep an eye out for small impulse buys and avoid them when you can. For bigger purchases, make sure you commit to waiting 24 hours before you spend anything more than £20.
4. Keep Track of your Spending
One of the best ways to improve your financial habits is to live your life on a budget. Budgeting might not seem like a lot of fun, but it’s an important way to make sure that you don’t spend more than you earn. To get your budget started, sit down with a complete list of all your incoming and outgoing expenses. Separate your outgoing money into essential purchases and bills, and things that you can do without.
Your budget will help you to see where you can afford to make cut backs. Just remember not to cut all of the fun out of your life, otherwise, you might have a harder time sticking to your budget. At the same time, keep track of your spending so you can see how well you’re doing over time.
5. Find Cheaper Ways to Get What You Need
Finally, spending less doesn’t necessarily mean having to cut everything out of your life except for the essentials. In fact, this is a good way to make sure that you fall off the budgeting wagon. Instead, your aim should be to spend less in certain places and reduce the amount you spend on the things you want.
For instance, go online and see if you can find any discount codes for items before you start spending your money. Think about downloading apps that can help you to save on important purchases. Even signing up for a loyalty scheme can be enough to give you some exclusive coupons.