You’ve used every excuse to justify that major impulse buy. As much as you’d like to stay within your budget, at the end of the month, you’re often left wondering where all your money went and you feel guilty about overspending. Instead of beating yourself up for it, here are three easy ways you can control your spending habits.
1) Pay yourself first. When you’re setting up a budget, start by setting aside money for your savings. Then divide your remaining money using the envelope system of budgeting. This way, you’ll have less excess cash and you’ll be forced to tighten your spending. Putting your savings first is like investing for your future self. To prevent yourself from spending your hard-earned cash, place it in an account without an ATM card access. Or better yet, invest in stocks or bonds or set up a retirement fund.
2) Use cash. You’re most likely treating every impulse purchase as an emergency, hence, you swipe your credit card every chance you get. Credit cards not only force you to spend money you don’t have but also sink you into debt through interest rates. Follow through with the envelope system and only spend what’s in each envelope. Once the money in one envelope runs out, it’s time to stop spending. For every purchase, use only the cash you have on hand.
3) Set up rewards. Why not give yourself something good to look forward to every time you succeed in staying within your budget? Set up a reward system for every financial triumph. Say you were able to stay within budget and save 10% of your income this month. Treat yourself to a cup of coffee or a box of pastries. Be careful not to overdo it, though. You can also set up punishments each time you go over budget or submit to an impulse buy. Ask a friend or family member to help you carry out the consequences of your spending. Having someone watch your every move will force you to keep your spending in line.
The next time you’re tempted to overspend, ask yourself if the purchase is worth losing all your progress in budgeting. Good or bad, habits don’t change overnight. Make a commitment to your budget and financial goals. Before you know it, you’ve overcome the temptation to overspend.
Are you a chronic overspender? How do you fight the impulse to splurge? Share your thoughts with us in the comments.