Life is full of surprises and you should always save money to counter any unexpected financial crisis in the future. The small amount that you monthly save is more important than the big amount you monthly earn. Do you always make monthly budgets and try hard to stick to them? Are you frustrated of over budgeting and want to control it? It is disappointing, but the big question is how to control overspending effectively.
Here, we discuss the top 10 smart tips to efficiently control overspending:
1. Identify the Overspending Factors
There are various factors that affect the spending behaviour of a person. The time of spending is one factor. Some people spend more during the daytime and some spend more in the night as per their energy level and mood. The environment of a person is another factor. If you are in a shopping mall or in a fair, then automatically you spend more. Peer pressure and lifestyle also play a very important role in overspending. Sometimes, you buy things just to show off or for the sake of friends. Just analyse and control these factors to avoid overspending.
2. Make a Realistic Budget
If you have a habit of making a very tight monthly budget then chill out! There is no point of aiming something which is not realistic at all. You shouldn’t shorten your budget nor stretch it. Plan a budget that fulfills your necessary expenses, including monthly EMIs. Don’t try to save money by avoiding expenditures that are extremely important. Otherwise, it will haunt you in the next month.
3. First Save then Spend
If you think that you can save money at the end of the month, then it is a wrong approach. Always remember this thumb rule – first save and then spend. You should keep aside money in the saving financial instrument before you start spending the rest of salary on your monthly expenses. Just forget what you have saved. Think of the future. You can fulfill many dreams with your savings. Even saving a few pounds monthly can bring change in your life
4. Compare and then Shop
Saving a few pounds on every purchase can boost your financial goals. Always compare prices of the products before you buy them. Check discounts and the best deals that you can avail. Try to buy goods online as website merchants usually offer heavy discounts. Always analyse your need before a purchase. Do you really need it? If yes, then buy it, but using your debit card or cash only.
5. Track your Expenses
If you really want to save money, then always track your expenses on a daily basis. Weekly tracking is not effective at all. A week is enough to disturb the whole month budget. You can create a tracker on your laptop or mobile phone. Just see what is the planned and actual spending. There’re various tracking apps that you can download on your phone and easily manage your budget.
6. Start using your Debit Card instead of the Credit Card
It is a well-known fact that the credit usage always leads to overspending. You go to a store and buy multiple things which are actually not required. Many people forget the fact that a credit card is actually a loan which they have to pay off in any case. It is a human nature to live in present and forget the future consequences. So, by increasing the usage of your debit card, you would be able to curb your long credit card bills. So always leave your credit card at home before leaving for the shopping.
7. Create an Emergency Fund
Besides saving money for your retirement, you also need to be prepared for untoward financial problems. Make a contingency fund and monthly put a fixed amount of money into it. It would benefit you in two ways. First, you would be able to overcome small financial problems. Second, your saving money will go untouched.
8. Keep your Savings in a Reliable Financial Instrument
Your savings are meant for your future life. If you have saved good money this month and want to consume next month, then it would defeat the whole purpose. Always put your saving money into various safe financial schemes from where you can’t withdraw anytime. Never keep all savings in hard cash in your home. Many people start consuming cash savings once they face even a small financial hardship. There are various mutual funds whose risk levels are almost zero and give you good returns.
9. Set Short-term Saving Goals
Short-term financial goals always motivate you for better savings and hence improve your spending behaviour. Set monthly targets like you will save 200 pounds this month or 1000 pounds in three months. It will keep you charged and don’t let you exhausted. Make your family aware of your saving plans and tell them you are doing for their future. Create a positive environment where each family member contributes to the savings.
10. Be Healthy to Avoid Expensive Medical Bills
You can avoid overspending on health bills by keeping yourself physically and mentally fit. Do yoga at your home. It will not cost you even a penny. Also, you will feel more confident and work hard for your future. Stress doesn’t allow a person to take right decisions. A healthy mind can earn and save better. So, be healthy for a better financial well-being.
11. Buy Used Products for Saving Money
You can save money by buying used or refurbished products. Go for a second-hand refrigerator or a refurbished washing machine or whatever you need. Buying a fresh home appliance will cost you higher and hence will disturb your monthly budget. Maintaining a good lifestyle is nice, but it shouldn’t be at the cost of your savings.
Overspending is a big problem, but we never give importance to it. You can’t save thousands of pounds overnight. Your small savings are like small plants that grow with time and later give fruits. You need to keep patience and be positive. Follow our above-discussed tips to handle your overspending habit better!