If you’ve ever felt overwhelmed by missed loan payments or overdue credit card bills, you’re far from the only one. Many people find themselves in the red in their monthly budget as a result of overspending.
People have many different reasons for overspending, so the first step toward a solution is to know yourself. Find out which habits lead to overspending, and then take charge of your spending with a plan to break these bad habits. The road to breaking a habit can be a long one, but if you keep at it despite setbacks, you can find your way back to a balanced budget.
Here are a few of the most common overspending habits and how to break them.
Overspending Habit #1: Deal-shopping for items you don’t really need
Solution: Looking for deals while shopping is a great idea if you want to save money. But if you become a compulsive deal-hunter, it might actually become a big problem. The key is to only buy the things you need. Sure, you may be saving some money when you buy a bargain, but it’s not really a deal if you spent money on something you weren’t going to buy in the first place. Try making a list of the essentials you need to buy each month, and don’t stray from that list, no matter how tempting the bargains seem.
Overspending Habit #2: Going out to eat too often
Solution: No matter how you slice it, buying food from a restaurant, ordering takeout, or visiting a fast-food chain is expensive, and those tabs add up fast. Cooking at home and being a smart grocery shopper can save you hundreds of dollars a month. Try creating a meal plan for the week, buying groceries accordingly, and making sure that you stick to the plan.
Overspending Habit #3: Buying extravagant gifts
Solution: Generosity is a wonderful quality, but it can lead to some hefty and unnecessary spending. Give yourself a reasonable budget when you shop for gifts, and stay within it at all costs. Your loved ones will appreciate the thought behind the gift more than the price tag, anyway. They already recognize your generosity of spirit, so stick to the budget!
Overspending Habit #4: Shopping to lift your mood
Solution: Being a shopaholic is a very real problem. Substitute your retail therapy for a thriftier activity when you’re feeling low. Try going out for a hike, reading a good book, or watching a marathon of your favorite TV show. All of these will hurt your wallet much less when you need a pick-me-up.
Overspending Habit #5: Impulse buying
Solution: People prone to impulse buying know that is a really tough habit to break. But fear not; it can be done! A few strategies include making a financial plan, leaving your credit cards at home when you shop, writing out your financial goals, and planning your shopping trip ahead. Remember that impulse buying has roots in your psyche, so it can help to examine your thoughts and feelings on shopping.
Overspending Habit #6: Paying for unused services or subscriptions
Solution: It’s so easy to overlook that unused gym membership and promise yourself that you’ll use it someday. So you totally need to keep paying for it, right? Wrong: It’s time to get real about your monthly subscriptions and assess how much you value or use them. That includes club memberships, magazines, loot boxes, and more. Subscriptions can be a real leech on your monthly budget, so make sure to weed them out and stop throwing money away each month.