Unplanned spending that falls outside your budget is a great way to drain your savings and leave yourself in a financially perilous position.
Going over budget can happen even to the best spendthrifts. It can be a big purchase or lots of little ones, but, either way, going over budget is bad news for your wallet! If you’re overspending and constantly dipping into your savings, you might be in trouble when a surprise bill rears its ugly head.
While there can’t be a little goblin hiding in your wallet to keep you from spending your money (though that would be kind of fun) there are some ways to keep your financial life on track! Whether it’s using the good old fashioned cash-only method (where you only spend cash and don’t use your cards) or locking your credit cards to disallow use, there are options out there for you.
Reigning in your unbudgeted missteps is an important thing to do before the spending catches up with you.
Are you a small spender? Someone who buys a lot of little things and thinks it’s better for your overall finances? You’d be wrong. While not as jarring as a major spend, those little purchases are quick to catch up to you.
According to Mint, it’s fairly easy to forget those standard little buys here and there until you add them up at the end of the week or month. It’s only then that you realize how much you’re really spending.
“It could be the $5 coffee now and then or that $20 on getting your nails done each month,” Mint said. “These small purchases soon add up. Just think: $5 per day on your coffee to work is $25 in a five-day working weekend. Say you had two weeks vacation; that’s $1,250 each year spent that you’re not accounting for. Track every little expenditure that you make. It doesn’t matter how small or infrequent it is, it all adds up and will give you the true idea of the amount you’re spending.”
It’s perfectly fine to spend a little on yourself here and there (you work hard, so you should treat yourself), but those treats need to be manageable. It makes it a little less fun or spontaneous, but try budgeting those little expenses each month. Tell yourself you won’t spend more than $50 or $100 or whatever fits your goals and try your best to stick to it.
Keep your eyes up.
“Keeping up with the Joneses” might be an old adage, yet it doesn’t stop being true even in the digital age. There is a certain kind of peer pressure to do as well as or better than those around you, even if it isn’t something you consciously think about. But that won’t stop peer pressure or an attempt to keep up your appearances from derailing your financial goals.
Jocelyn Black Hodes of HerMoney ascribes societal pressures as major financial influences. It can be difficult to say no when your friends want to get together for dinner at an expensive restaurant. It’s difficult to discuss money because it’s a sensitive topic. But you have to be honest with yourself and your financial situation to avoid going into a hole.
Hodes says the attempt to keep up appearances simply restarts the cycle of overspending and while it can be hard to step out of the cycle, it’s important to take that step.
“Focus on your goals, rather than your neighbors.” she said. “Take some time alone to think about what’s most important to you—what you want to have in your life (independent of what your peers may have). Once you’ve identified your goals and what you’ll need to get there, keep them front of mind (it may sound corny, but visual reminders help). When you’re saving money for something that’s important to you, what your neighbors are doing with theirs will seem less important.”
Treat retail like a museum. If you touch something you might not be allowed back.
That sounds silly, but there is a temptation in touching an item. It influences you into thinking you need it or tempts you to put it into your basket/cart. So don’t let that idea even pass through your mind. Just don’t touch anything you aren’t setting out to buy anyway. Is it on the list of must-haves? Then leave it be.
“Studies have shown that customers who actually pick up an item or try something on are more likely to buy said product,” according to Military.com.
Not only can holding an item influence whether or not you buy something, but what you are already holding can influence it too. Big Think has a similar take on the issue which includes a study done that found subjects were drawn to items similar to ones they were already holding.
For example, if you are holding your smartphone and craving a candy bar, you will be more likely to want a Kit-Kat than any other variety. Why? Shape and weight distribution. Your brain is already aware of the concept of that shape and size, so it only makes sense that it would want something it’s familiar with.
Embrace your inner artiste.
When it comes to overspending, sometimes special occasions can foil even the stingiest penny pincher. No matter what the case may be, however, there is a way around even the biggest celebration. The heart can provide the greatest gifts of all—which can also save you some money if you’re willing to put in the time.
In respecting your personal budget, Success Story suggests using your creativity to come up with something spectacular for the person you’re celebrating which never has to break the bank.
According to Success Story, “Whenever there is a party, a birthday or any occasion, when you need to buy gifts, you should use your creativity. Make gifts yourself instead of buying anything from outside. Use your imagination and make precious gifts for your loved ones. The gifts which you will make with your hands include love, care and affection; so these will be more precious for your relatives and friends in comparison to the gifts you buy from the shops.”
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