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Are you the kind of person that starts every month with the best of intentions to stop overspending and get your budget under control, only to end up binging on your credit card by the 30th?
We all make mindless purchases from time to time, without really thinking about the consequences of our actions – and there’s nothing wrong with treating yourself when you’ve got the money in your account. The problem happens when you realize that your impulse spending has chipped away at your hard-earned savings cushion and left you with nothing to fall back on in the case of an emergency.
If you’ve been having issues with spending lately, here are a few tips to get your budget back under control.
Refine your Current Budget
Sometimes, when your current spending strategy just isn’t working, the best thing you can do is go back to the drawing board.
Start by gathering as much information as you can about your incoming and outgoing expenses. That means making a pile of all your pay stubs, your bills, and any other receipts that might indicate what you’re spending your cash on each month. If it helps, go into your online bank account and download a list of all your incoming and outgoing expenses there too.
The key to a good budget is separating your must-have expenses from the luxuries that you can cut back on. If you don’t have many luxuries to reduce, remember that there are ways you can cut back on those must-have expenses too. For instance, if your mortgage rate is too high, you could consider remortgaging.
Start Spending Cash Instead of Card
One of the biggest reasons why so many people over-spend on a daily basis is that they can buy everything just by flashing a piece of plastic. When you’re not actually working with money, it’s much easier to spend more than you realise. This is particularly true if you consider how easy it is to buy things from your phone these days.
To make sure that you’re tracking your spending as accurately as possible, switch to using cash instead. Simply figure out how much cash you’re going to need at the start of each day, and take that with you wherever you go, instead of your cards. If you do end up wanting to buy something extra, you’ll have to return home for your card, and that means more time to reconsider your purchase.
Choose the Right Credit Products
Sometimes, the answer isn’t getting rid of your credit card entirely, but looking for one that rewards your spending, instead of harming your financial health. Find a credit card that isn’t going to make you suffer every time you spend on it. Comparing your options means that you can choose a card with the lowest interest rates, and the biggest potential benefits too.
The same comparing strategy applies to other credit products too. For instance, when you decide you want to take out a personal loan, make sure that you evaluate your options and choose the loan with the lowest possible APR. Don’t jump into a loan just because you know that the bank is willing to say “yes” straight away.
Look for Cheaper Ways to Entertain Yourself
Nobody wants to sit in the house feeling bored all the time. We all look forward to the weekend when we can get out and spend some quality time with our families and loved ones. However, it’s important to make sure that your quest for fun doesn’t end up destroying your budget. There are plenty of ways that you can cut down costs by looking for cheaper entertainment.
For instance, instead of paying for the whole family to go to the cinema on a Friday night, buy a cheap bag of popcorn from the supermarket and borrow a DVD from a friend. Alternatively, you could try loading a movie up on a streaming service like Netflix – even if you just use it once a week, it’s still cheaper than the movies.
Set Financial Goals
Finally, make sure that you have some goals in place to keep you motivated and focused as you strive to improve your spending habits. For instance, tell yourself that you’re going to save at least 10% of your paycheck each month into a separate savings account for the future.
Over the next six months, you might decide that you want to save at least $300 into an emergency bank account, which you can use whenever you face an emergency. Even telling yourself that you’re going to take lunch with you to work every day for a month instead of buying something while you’re there can be enough to start making a difference. Find your goals and stick with them.