5 Ways You Are Overspending and How To Fix It
Overspending is such an easy thing to do. We are all guilty of it. We sit down and try our hardest to come up with the perfect budget plan for us. We’ve calculated our expenses and figured out how to best split our money while still putting some aside. But then, in the blink of an eye, we spend way too much. What happened to our plan? Well, as I said, it happens to all of us sometimes. Sometimes we take the “treat yourself” motto a little too far. Or we’re emotional shoppers and shop whether we are super stressed or happy. Or – the worst one – we come across a little extra money and think “hey, I have this extra cushion that I can spend!”. But, whatever the reason, the best part is there are ways to curb these spending habits. These are the five most common reasons why we overspend and how to fix them.
Ways You Overspend
Your Budget Isn’t As Great As You Planned
If you budgeted to have $200 to spend however you’d like but end up spending $400, your budget may not be as great as you thought. Or you may need some help adhering to it a little bit better. If you are spending more than what you planned, your budget isn’t working for you anymore.
You Live Above Your Means
If you can’t pay off your major bills but still find the money to buy the latest iPhone or the newest shoes, you are definitely overspending your money. Your lifestyle should be determined by your finances, not the other way around. If you are splurging on big, flashy items but burying yourself in debt, you are definitely overspending.
You Can Only Pay The Minimum On Your Credit Cards
Credit cards make shopping a breeze. But pretty soon, our credit card bill can be way too high to pay off. If you are choosing to only pay off the minimum balance, you are an overspender. Not only are you an overspender; you are actually creating more debt for yourself in the long run.
You Spend More As Your Income Goes Up
Maybe you’ve run into some money. Maybe you took on some part-time jobs or you got a raise at work. If you are then taking that little bit of financial cushion as an excuse to increase your spending, you are definitely overspending. Soon, your “extra cushion” of the money goes away in a flash.
You Use Sales As An Excuse To Shop
If you are using sales as an excuse to spend money, you are overspending. Sales can be a great thing. It’s important to find bargains for the items we need. But they can also take away our impulse control. Sales can be our excuses for buying things we really don’t need but just really want.
Ways To Fix Your Overspending
Create – And Stick To – A Realistic Budget
A budget is really important to implement and stick to. It’s the difference between being buried in debt and actually feeling good about your financial situation. If you’ve tried to implement a budget but just can’t get it, try budgeting apps to help you.
Open A Savings Account
To really start building up some savings, you should look into a savings account. A savings account is an account you set up with your bank that takes a portion of your paycheck and puts it into this account. It’s there for you to deposit money when you need it.
Avoid Sales Unless You Need Something
Yes, sales are great. We should be looking for our needed items at a good bargain. But just because a sale is going on, doesn’t mean you need to buy something. Instead of hitting every sale, take a minute to really think if you need these items or just want them.
Use The Envelope System
The envelope system is a system where you divide your cash in different envelopes and label them according to your expenses. So, you’ll have one for rent, gas, groceries, and so on. This system could be the right system for you to start developing good budgeting habits.
Start A Spending Journal
A spending journal is as it reads; it’s a journal that you record all of your spendings throughout the week in detail. This allows you to keep track of your spending and how to best split your money up. It also keeps you accountable for your spending habits.
Get A Wisconsin Title Loan For Extra Help
Now you know ways you overspend and how you can curb those habits and save money. But sometimes you just need extra help paying off your debts and start saving your money. When you need that little bit of extra help with your finances, a title loan or a signature installment loan from Wisconsin Auto Title Loans can be just the thing you need. The process for either loan is simple. Just start by filling out our online form and we will give you a call and tell you what else needs to be done.
Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.