Do your bank account and wallet run dry before every payday, regardless of what you do to change things? Do you have the overspending curse?
First off, you are not alone. For most people, resisting the allure of an impulse purchase is one of the most difficult things to do. While this does not mean that you do not understand the importance of smart financial decision making, it’s important to recognize why you’re unable to cultivate positive financial habits to leave you with some money at the end of the month.
But whether you overspend through impulsive purchases or through neglecting your savings, you must understand why you overspend to stop this damaging habit.
It’s also important to remember that overspending is as simple as buying an expensive morning latte when you cannot afford it. Saving money could and avoiding debt could be as simple as you making a trip down to the barber shop down the street once a month or shaving the hairs at the back of your head weekly to cut down the cost of shaving hair. Saving could be as simple as brewing your coffee at home or carrying lunch to work because you cannot afford to buy lunch every day.
Why then do you overspend?
Ignorance
Do you think that your overspending comes from you having no idea about just how much money leaves or enters your wallet every day? While you might have an estimate of the amount of money you pay for clothing, gas, or groceries, it’s not enough if you’re going to have money at the end of the month. You must sit down and determine where your money goes. You can avoid overspending easily by tracking all your expenses.
Making purchases using a digital wallet or a credit card
Credit cards and digital wallets are convenient, but they are also leeches that drain your account faster than you can bat your eyes. These convenient payment options fuel overspending, and this happens because you are unable to monitor your spending habits.
You should remember that it is very easy to part with money. So, starting today pay using cash and you will see how easy it is for you to say no to an unplanned purchase. You cannot spend more than what you have budgeted when you have cash. All you need is discipline; a great deal of discipline.
Lack of discipline
Of course, this ties to the point above – you might not want to hear this, but you overspend because you lack the willpower to say no to something you think you want or must have immediately. For most people, overspending comes from the fact that you fail to think or plan ahead. The truth is that if you have a long-term goal that really matters to you, you will be more careful about where all your money goes, and you will stop yourself from making that impulse purchase if it doesn’t help you achieve your long-term goals. For example, you will stop spending a lot of money on unnecessary things if you know that you need to save up for your child’s education.
Want to stop overspending? Create a concrete/ reasonable spending plan, have a concrete/ time-tied goal, cut spending, automate your savings, calculate your work cost, and identify other ways of rewarding yourself.