April 8, 2021
According to a 2019 report from CNBC, consumers in the U.S. overspend on average by a jaw-dropping $7,400 every year! With credit cards, pay-later plans, and endless sales, it’s easier than ever to join the millions of people who end the year in a financial hole.
Luckily, building positive spending and saving habits isn’t too challenging. Yes, it takes some discipline. But by looking at some popular ways to curb overspending, you can get started on the right path today.
Carry Cash Instead of Your Credit Card
While credit cards do have their place in the world, they have a tendency to enable bad spending habits. By having what may feel like endless purchasing power to get whatever you want even if you don’t have the money right now, overspending happens.
Instead of carrying a credit card, carry cash or a debit card. And only bring the amount of cash you plan on spending for the particular errand or event. Eventually, as you build better financial habits you may be able to put the card back in your wallet. But until then, make it impossible to overspend. As a substitute for cash, use a debit card but be very disciplined about how you use it.
Make a Plan to Curb Impulse Purchases
Everyone is always scared of the ‘B’ word (budget), but it really is the key to end overspending. Generally, the reason people aren’t big fans of making a budget is that it puts a spotlight on their bad habits.
Here’s the advice. Set your ego aside, even though it might feel uncomfortable, and create a budget. When you know what you really can and can’t afford, it helps to curb impulse purchases that you know are outside the lines.
Don’t Save Your Credit Card Info on Your Computer or Smartphone
Online shopping is one area where a lot of people struggle with overspending. With one-click purchasing, it’s the ultimate convenience. However, when purchasing is too convenient, it can create problems for people working to curb their spending habits.
Don’t keep your payment sources anywhere near your computer nor have it saved on your browser. In a world of Apple Pay and Google Pay, it’s easier than ever to commit a one-click purchase online. The extra time it takes to get your wallet can be long enough to give you time to realize the purchase isn’t worth it.
Track Your Purchases
A lot of people who overspend don’t realize they’re doing it until long after the credit card bill shows up. If you set up a way to track your purchases in real-time, you might catch spending “mistakes” and see where your money is really going.
This can be as simple as keeping a little notebook and a pen in your pocket or taking notes on your phone. When you realize you’re pulling that notebook out pretty frequently, you may get the motivation to make a change. There are also multiple apps that can help you track your purchases in real-time and provide mobile notifications to help you stay aware of your spending.
Why This All Matters?
Ultimately, curbing your overspending is about setting you up for financial success. Not only can it prevent you from going into debt, but it gives you the financial flexibility to do things to get ahead. Things like investing in your future, preparing for retirement, and becoming debt-free can do amazing things for you and your family—and it only takes small steps repeated over and over again.
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