Six steps to curb your habit of overspending
Written on Tuesday, December 15, 2015
By Ravindra Mohan Pant
Have you ever thought how much amount are you spending in a month and is it the right amount that you should spend or are you overspending? Of late, there have been various cultural changes in the society, like, the younger generation is now moving to other places where they work and live independently. Due to fast moving lives, and job responsibilities, it becomes very difficult to manage things as perfectly as were with family. Mostly we tend to overspend on unnecessary things, which would have otherwise turned into productive investment.
Let us see, how. Before moving further ask yourself the following questions
-Do you plan your monthly budget?
-Do you keep an eye on expenses?
-Whatever your expenses are, are you spending right?
These are not just questions but, thought provoking arguments on how correct are you while planning your life financially. And if by chance, you’re eating up your savings or building up debts, you’re likely to be overspending! A budget can help you crush your outstanding debts, take charge of your financial future, and even become a happier, more relaxed person. Budgeting does not imply that you start spending less but rather it helps you differentiate the appropriate expense from the one that is not required to be done at all and make more effective financial decisions.
Steps to Budget Your Money
Track your past records of expenses: In order to find where Is your money going you are required to collect all the past bills, card bills, debit or credit card and all the petty slips that can account for considering total expenses.
Make your own monthly plan: Compare your planned expenditure amount with the actual amount spent in each category, you can easily make out are you staying on budget. If your actual amount is equal to or less than your planned amount, then you are staying on budget. If the actual amount is more than the planned amount, you are overspending. And if overspending, see if you can think of ways to cut expenses.
Give a re-think to you flexible expenses: Now re-think where in flexible expenses you can really save, where you are paying that extra which is actually not required. Easy lifestyle changes make huge differences. Cutting out a daily Rs. 20 coffee reduces your annual expenditure by Rs.600*12= Rs. 7200/- per year. Add magazines, cigarettes, chocolate, parking and more, and savings mount rapidly.
Avoid buying unnecessary clothes or eating out regularly: The best thing is to avoid eating out every second day when you are able to carry lunch. This way you just shoot up your expenses only. Also keep watch on the number of clothes you are buying which you already have and which you actually DO NOT REQUIRE. This can make a lot of difference.
Spend this month, what you earned last month: Save enough money to go an entire month without touching your regular income. Then the next month, spend last month’s income while earning this month’s income. You’ll spend this month’s income next month.
Avoid carrying your cash cards along every time: Don´t take your credit or debit cards when you go out for shopping. It is the best way to get control on buying what you actually ‘need’ than what you ‘want’. And if you carry your cards (debit or credit), it´s all too tempting to pull them out when you see something you like, or spend more in the supermarket. So take a fixed amount of cash, then you won´t be tempted to spend more.
By paying a little attention on our expenses we can save more and invest and create attractive corpus. Just saving our monthly expense of Rs. 20 on coffee, one can actually save and make an annual investment of 7200/- . If by saving Rs. 20, can make such a difference then how strong financially we will become when we go for an effective financial plan. Think again!