Overspending is something many of us are guilty of. It seems no matter how much we plan and budget, we often fall victim to impulse purchases and spend more than we had planned on. If we’re not careful, not only can we take a big bite out of our savings, but we can also land in debt. If you don’t try and follow, or maybe not even have, a budget you may not realize you’ve overspent until it’s too late? Here are a few signs that you may be spending more than you should and some tips for breaking the habit.
Signs that you’ve been overspending:
How to prevent some of that overspending
Keep organized, if you have some clothes in three different closets, tools in four different rooms (and probably some in the garage) and your bathroom cleaning supplies spread out between two bathrooms and underneath the kitchen sink, it’s easy to buy something you already have. By making a list of what you need before every trip to the store, department or grocery, it’s only easy to check and see if you already have some of those items if your items are all hanging out where they should.
It’s preferable to spend a little bit more for quality than it is to find something cheap that you will just have to buy again a month later when it breaks. Not only does that waste money it wastes your time as well and is extremely frustrating. It is important, however, to understand why you’re paying extra for any product. If you’re paying extra for quality that’s a wise investment, if you’re paying just because of the brand name, it’s likely not worth it.
Sometimes, when you see something you love and just “must have it”, your emotions can easily control your mind. One way to reduce the number of impulse purchases is to get in the habit of waiting for 10, 15 or 30 minutes before purchasing anything that you had not previously planned on buying. This gives you time to consider the impact, will the benefit of the product or service you are wanting to purchase outweigh the economic impact it will have on you and your family? People often point out that “time is money”, well a little bit of time can certainly save you some money.
Every time you make a financial decision, think about how that decision will impact the future.
Broaden your perspective. Don’t just think about what’s happening now, but rather how one decision can effect your financial future. Don’t buy something on credit if you’re not planning on paying it off quickly. Set some short-term goals that are there to help you accomplish your long-term goals. Here are some examples:
These short-term goals are sure to help you meet long-term goals. When you see that you can spend less by paying more attention to your daily choices, you may find your lifestyle changing a bit. Most of these goals aren’t easy, but they were rewarding to meet. Once you get your overspending under control using short-term goals, your long-term goals will come into better focus.
Many times, money spent is spent to relieve boredom. There is no need to go shopping but it becomes something to do to fill some time. It may not seem like it but an increase in social life may save you some money. Join a movie club, or book club, if that’s your thing. Or, how about a recreational softball or soccer team. Hiking, bowling, crafts, if there is a hobby that interests you, there’s a group out there doing it that would love to have a new member.
If you have a friend, peer or neighbor who’s constantly bragging about the amazing deals they found and showing off their shiny new toy, it’s easy to convince yourself that you need one, too. But it’s important to be able to separate the needs from the wants. The fact that someone else has something has no bearing on your need for the same thing.
The text sent by the local pizzeria place declaring that “Now is the best time to order that 2-Topping” does not mean you need a pizza. A tweet reminding you that Macy’s three-day weekend sale starts tomorrow does not mean you suddenly need three new outfits. Turn off those alerts and make purchases when you have a need, not when someone is selling you something. If you know you need a new pair of sneakers before next season starts, its smart to wait for a sale. But it is never a good idea to let the sale create the need.