Realizing the effects of overspending usually doesn't occur overnight. Years of impulse buys and aspiring to live a life that is beyond reach are often cited as reasons why some people consistently end up with more month than money. The result is that many individuals are struggling to pay their bills on time and are carrying significant debt.
Overspending is generally driven by underlying issues that should be identified and addressed before anyone can begin to get their spending under control. Beyond this initial step, here are strategies to help stop the financial bleeding.
Develop a Budget and Track Expenses
In order to figure out where financial leaks are occurring, it's essential to monitor daily expenses. A written budget can provide structure on how to successfully manage earned income.
Match up current income against all expenses to determine if the expenses are exceeding income. In this case, options can include: finding ways to increase income, cut out some expenses altogether, or reduce certain expense categories. It can take a few months of trial and error, therefore it is important to be patient during the process and continue to develop positive money habits.
Put Away the Credit Cards
Some are able to use credit cards responsibly and pay the statements in full every month. Many, however, are carrying balances for months and years while interest charges add to their growing debt load every day. Consider cutting up or freezing credit cards except one in the event of a true emergency and leave it at home.
Spend only what is available by paying for all purchases with cash, a debit card or a prepaid debit card. A prepaid debit card contains money loaded onto it that is not connected to a bank account. This money management strategy can tame overspending by controlling the amount loaded onto the card. Shop around for a prepaid debit card that offers the most benefits with a minimum of fees.
Create a Financial Goal
Money itself is just a tool. Assigning money for a purpose helps to align one's spending in a way that achieves the intended goal. Instead of spending on things that don't provide substantial value, choose to focus on accomplishing meaningful goals such as paying off debt, saving for emergencies, funding for retirement and other major life events. Aim to reduce the emphasis on material possessions and increase the happiness quotient in life such as family and friendships.
Steer Clear of Temptation
If the malls and discount stores are sources of spending triggers then limit the amount of time spent there if they can't be avoided altogether. Avoid shopping if emotional triggers, such as anxiety or loneliness, arise as they may lead to renewed overspending.
Work with a list when it comes time to visit a store and make the commitment to stick with purchasing items only on said list. In the event the urge to shop becomes too much to bear, focus on alternatives such as going for a walk or talking to a friend.
Know When to Seek Help
There is no shame in admitting that a spending problem has grown beyond control. Seek out the assistance of therapy or counselling to address the issues surrounding compulsive spending. Debtors Anonymous can also provide assistance to those who prefer a group support approach to dealing with spending and debt compulsions.