Overspending does not always equate to poor financial management.
Quite the contrary, in most cases. For starters, if you’re reading this, pat yourself on the back.
Congratulate yourself for having the presence of mind to regain control of your financial wellbeing. Keep in mind, it’s more common to overspend than to not.
If overspending is a perpetual problem derailing your financial wellness, there are actionable strategies to sidestep the act of overspending.
Practice Conscious Spending
If you are someone who cannot account for where your money goes each month, then your first step is to become financially awake and aware.
Review your bank statements to understand exactly where your money goes. Does everything add up? Do you spot any unnecessary costs that could be eliminated? Do any purchases suggest that you are masking a deeper problem or feeling?
The objective is not to feel financial shame or harbor guilt during your review. What matters is that you reflect and correct in order to create a better financial future.
Three words to remember: spend with intent.
Put A Freeze On Credit Cards
If credit cards are a weakness for you then you need to consider figuratively (or literally) cutting your credit cards. And if you can’t cut them off cold turkey, then at least cut back substantially.
It’s reasonable to pay for purchases on a credit card for rewards such as cash back or miles, but you need to be able to pay off your balance before it accrues interest.
Living within your means is critical to financial wellness and that may require you to cut off your access to credit cards, either for a fixed or indefinite time period, in order to stop enabling the pattern.
Sidestep Debt
A money mistake to avoid at all costs is to not take on debt that you know you cannot pay back. Taking out personal loans for unnecessary reasons can lead to a debt mountain and cripple your quest for financial freedom.
Avoid dipping into lines of credit (LOCs) or taking out personal loans unless absolutely critical. This is why having a robust emergency fund to fall back on is imperative.
Steer Clear Of Social Media
Social media makes it very easy to fall prey to impulsive shopping behaviors. Ads, that are specifically targeted to you, will never fail to pop up in your feed. If you suspect that social media is contributing to your overspending, consider quitting or limiting your use of it.
After a 30-60 day hiatus, measure your results. Did you cut back on your spending? Have a one-on-one check-in with yourself to assess your progress or lack thereof.
Don’t Call It A Budget
Budgeting often feels burdensome. As such, budgeting is associated with restrictions, which naturally causes aversion to the B word.
Contrary to belief, budgeting doesn’t mean penny-pinching or compromising your quality of life completely. It’s all about effective budgeting. In other words, think of realistic ways to trim your wants and prioritize your needs in a practical way that you will actually employ.
By setting unrealistic restrictions, you are basically setting yourself up for failure. Too strict of guidelines might lead you to feelings of frustration that prompt you to abandon your budget altogether.
The best type of budget is one that you will actually use. A smart budget should be unique to you and feel rewarding instead of boring.
Say Adios To Autofill
Having payment information automatically filled is immensely convenient (and dangerous) for shopping online. It’s almost too easy to make impulsive decisions and rack up expenses in no time at all.
If autofill is enabling your overspending, then deleting your saved payment information could help interrupt your next attempt to shop online.
Think of it like planning ahead to cause yourself a beneficial inconvenience to support your money management.
Your future self will thank you.
Make Your Cash Reserve Inaccessible
Maintaining a sturdy savings is key to financial wellness. Your savings are not only for your future goals (i.e., buying a home, traveling, starting a family) but savings also serve as a safety net.
Should you lose your job or fall on hard times, your savings may be your financial backbone to keep you upright.
Therefore, having access to dip into your savings and/or emergency fund is a financial vulnerability. Consider safeguarding your savings instead by storing it in an account that has limited withdrawals per month.
Find Accountability Allies
Speaking your financial goals aloud can embed accountability and might even help you manifest the life you want.
By sharing your money goals with people you trust, or perhaps with others who share the same goals as you, you can help establish group accountability.
Seek support groups, whether in-person or virtual, that will help keep you aligned with your goals. The value of accountability allies cannot be overstated as positive influences can keep you on track and significantly support your financial wellness journey long-term.
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