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How to stop spending more than what you earn every month

Do you want to stop overspending but at the end of the month, you find that you’ve spent more than what you earned?

Well, if you have experienced this phenomenon, then you’re not alone.

Many people try hard to quit spending money more than what they earn.

However, it’s not that difficult.

Here’s how you can not only stop spending more than what you earn but also save a significant amount every month.

Believe in yourself that you can do it

If you do not believe in what you do, you can never achieve that.

So, first, believe that you can stop your overspending habit.

Listening to success stories will help you quite a bit.

When you become demotivated and feel like spending, listen to these stories, and that will help.

Know what triggers your spending habit

You have to identify certain psychological and emotional triggers that lead you to spend more.

Here are 11 such spending triggers. If you are aware of them, it’ll be easier for you to avoid overspending.

Check out how you can identify those spending triggers, how they affect, and ways to avoid them.

Spending Trigger 1: Any emotional event you experience

How it affects:

It can be a happy or sad emotion.

For example, you may think shopping can help overcome an unhappy emotion.

Similarly, a happy occasion can entice you to spend more as at that moment, you don’t think about the future and your financial life.

How to avoid:

Shopping can help you to be happy and overcome an unhappy emotion. But, be aware of not spending limitlessly.

Be extra cautious when you want to overspend as you’re happy. Look for alternative ways to celebrate the moment by staying within your budget.

Spending Trigger 2: You are used to a certain lifestyle

How it affects:

When you get accustomed to a certain lifestyle, it might be difficult for you to maintain that if you face any financial hardship.

What happens is if you’re used to getting the money you want from childhood, you feel the urge to spend to maintain your lifestyle. Likewise, if you’ve experienced financial hardship in your childhood, you may want to spend more to achieve the lifestyle you always wanted.

How to avoid:

The best way to deal with this is to plan a budget and stick to it.

You may have to sacrifice certain things, mostly the material ones, to increase your bank balance and secure your financial future.

Spending Trigger 3: Spending can help you overcome stress

How it affects:

When you get accustomed to a certain lifestyle, it might be difficult for you to maintain that if you face any financial hardship.

This is one of the most common triggers most of us have experienced.

According to Cullen Hardy, a clinical psychologist and owner of “The Hardy Group”, a business consulting firm, human beings hate feeling stressed and love quick relief; spending can give that feeling of quick relief.

How to avoid:

When spending, just remember, overspending can lead you to feel more stressed. So, try other therapies that can help you relieve stress.

Going out with friends other than shopping, or arranging a potluck party can help you.

Spending Trigger 4: Having multiple credit cards

How it affects:

A study carried out by two MIT professors revealed that customers intend to pay more when paying with credit cards instead of cash. The psychology behind this is that you don’t feel that you’re paying more.

You tend to spend much more when you have multiple credit cards in your wallet, and you’d also have to bear certain credit card fees.

How to avoid:

If you feel you tend to spend more when using credit cards, try to buy with cash.

However, buying with credit cards and clearing the bill at every billing cycle helps to boost the score.

Spending Trigger 5: A specific time of the day

How it affects:

Do you feel more energetic in the evening than in the morning? You feel energetic at certain times of the day.

When you’re less energetic, you tend to shop more.

How to avoid:

It is better to shop when you’re energetic and feel less stressed.

By doing so, you’ll make better and wise shopping choices and purchase necessary items, instead of spending on items that won’t be much beneficial for you.

Spending Trigger 6: Shopping is what you’re addicted to

How it affects:

Compulsive buying disorder is one of the most common triggers of overspending.

Many people can’t control shopping for items that they may not need much. As a result, they invite financial trouble.

How to avoid:

If you think you feel the same, avoid shopping zones as much as possible.

When meeting a friend, reserve a restaurant, or meet at a park instead of meeting at a shopping plaza.

Also, whenever you go shopping, make a list and don’t buy anything that’s not on your list. If you like something, write it down and consider buying it later.

Spending Trigger 7: You succumb to peer pressure

How it affects:

Just think once - Do you often spend more when you’re with friends? If you’re out with a friend who loves to shop, he/she will be a bad influence on you. So, from next time, if your friend invites you to go shopping, decline his/her request and meet him/her somewhere else.

This is just an example; there can be other peer pressure too. Meeting up with the joneses is another reason for people spending too much.

How to avoid:

Do not feel shy to let your friend(s) know that you’re following a budget, and ask them to help you.

Do not overspend just because your friend has bought an Omega watch or a Burberry bag.

It is better to meet friends over a cup of coffee instead of a brunch, go hiking instead of going to movies, etc. This will help you socialize and save money at the same time.

Try to be around friends who support your views and help you attain your goal.

Spending Trigger 8: Retailer tactics entice you to spend unnecessarily

How it affects:

Whenever you visit a grocery shop, usually you’ll see some enticing offers, especially during special events such as Christmas, Thanksgiving Day, etc.

The retailers also use certain words that entice customers to purchase items; otherwise, they think they’ll miss the offer.

How to avoid:

To combat this trigger, the best thing is not to buy that thing when you first see it.

If you feel the same urge after 1-2 days, you can think about whether or not to buy it. In most cases, you’ll lose the urge to purchase that item.

Spending Trigger 9: Special occasions entice you to overspend

How it affects:

Most of us tend to spend more on special occasions, say marriages, holidays, etc. For example, we tend to spend more when it’s one of our special friends’ weddings or it’s the holiday season.

We seem to purchase more than what we need to or end up buying expensive items.

How to avoid:

Perhaps the only way to deal with this spending trigger is to plan a budget.

If required, you can plan a budget for a special event (like a Christmas budget, a friend’s wedding budget) as well, so that you don’t end up spending more.

Spending Trigger 10: Spending more time on social media

How it affects:

The Journal of Consumer Research published a report that stated that people tend to display much less self-control if they use social media for a longer time. The study also revealed that with more usage of Facebook, the credit card debt also increased.

How to avoid:

Whenever you feel the urge of purchasing something, think about whether or not you need it.

A good way to control the urge is to wait for 2-3 days. If you still feel the same urge, analyze whether or not your financial condition permits you to buy that item; if not, first save the amount, then purchase it.

Spending Trigger 11: You want to please someone

How it affects:

All of us want to please others with the expectation of getting back the love in return. So, we don’t think of our financial situation when we want to gift someone to please her/him.

According to the relationship experts, by doing so, we try to win over that person so finances become immaterial; and in turn, we end up spending quite a bit.

How to avoid:

Always remember gifting expensive gifts will not help you make a relationship happy, rather it can be a deal-breaker.

So, don’t want to please someone by going overboard with expensive gifts.

Plan a budget, a realistic one

Budget! Budget! Budget! The only thing that can curb your overspending nature.

Planning just a budget won’t help you much.

You would have to plan a realistic one that you can follow without much effort.

To do so, take into account all your sources of income and your spending to each cent. Now, at first, keep aside an amount, say about 20% for your savings, 50% for meeting daily necessities, and just 30% for your personal use.

Allocate a certain amount for each item on your spending list. With time, you’ll be able to plan a suitable budget.

You may not be able to follow the budget by 100% in the first month. But, never mind. With time and suitable modifications to your budget, you’ll achieve your goal.

Keep a close track of your spending

Every day, at night, analyze what items you’ve spent money on, and think whether or not it’s worth it.

Make a note of the things which you think you could have done without.

This exercise will help you save a decent amount.

Just make sure you track your expenses, however small it may seem to be. Keep a detailed note for every cent.

Just ensure that you won’t use the money, designated for one item, for purchasing anything else.

Say ‘No’ to yourself and others

Often we hesitate to say ‘No’ to others, but it’s required. More important is to say ‘No’ to yourself.

Whenever you purchase any big item, an item not on your list, or spend from your 30% allocated amount to yourself, make sure you ask yourself whether or not it’s worth it. If required, take 1-2 days time and decide whether you still need it.

Most times, you’ll be able to avoid unnecessary expenses.

It will become a practice once you start doing it.

Open an account in a bank that offers good terms and conditions

If you think your bank is not treating you well, change your bank or open an account in a bank that offers suitable terms and perks.

A bank may offer interest on your checking account and eliminate fees for ATM use.

Moreover, a credit card with good cashback offers, especially annually, will help you tackle your holiday expenses effortlessly

Stick to cash as much as possible

If I say that stop using credit cards, you can ask what about credit score! Won’t it affect your credit if you stop using credit cards?

Well, that’s true. But when you need to change your overspending habit, at least for a couple of months, stay away from credit cards.

From the third month, make a promise to swipe your cards for purchasing things on your list and as per your budget.

Moreover, a credit card with good cashback offers, especially annually, will help you tackle your holiday expenses effortlessly.

And, most importantly, repay the entire balance at every billing cycle to avoid experiencing debt problems; otherwise, you may have to struggle to get out of debt.

So, are these tips useful?

Do share how far you have been able to control your overspending nature
With proper help you can
  • Lower your monthly payments
  • Reduce credit card interest rates
  • Waive late fees
  • Reduce collection calls
  • Avoid bankruptcy
  • Have only one monthly payment
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