If you’re determined to reach your savings goal this month and want to have more control over your finances, you’ll need to be very good about monitoring your spending habits and making sure you’re not spending more than you planned. Buying things you don’t need and shopping out of boredom are just two warning signs that indicate something is out of balance in your life. For many people, shopping and spending is like a drug and can help to alleviate stress, anxiety and fear. It’s also a costly drug and can prevent you from dealing with real problems head on.
If you want more control over your finances, keep an eye out for these warning signs that you’re spending too much money:
1. Not paying bills on time. Forgetting to pay bills on time can end up costing you a lot of money in late fees, surcharges, and you might even be left with a higher interest rate. Make sure you’re not wasting money on these extra fees by setting up a bill schedule or calendar.
2. Spending when you’re upset. If you’re feeling sad, depressed, anxious or experiencing other negative feelings, spending money can seem like a quick fix. Shopping and spending can help you feel better in the short-term but can also make you end up spending a lot more than you budgeted for. Make sure you’re not using spending as a drug, and find other ways to manage your feelings.
3. Buying on impulse. How often do you purchase items from infomercials because you think you “need” them right now? Do you buy things after seeing an advertisement on TV, online, or in the store? If you tend to be an impulsive shopper, commit to buying only things you have planned to purchase within a given month. Make a “wants” and “needs” list and commit to sticking with it so you’re less likely to spend on impulse.
4. Not contributing to a savings account. Are you spending every dollar that you earn each week? If you’re still living check to check and aren’t building up a savings account, it’s time to take a close look at your expenditures and find ways to scale back on certain expenses. If you’re not contributing even $50 a week to your savings account, you may be spending too much money in other areas. Find ways to cut back on certain expenses so that you can contribute at least some money towards your savings.
5. Becoming more dependent on your credit cards.
If you find yourself charging up high balances on your credit cards, you are probably living beyond your means. This is a red flag that you are spending too much money and it’s time to curb that spending habit. Stop using your credit cards altogether and stick with a cash-only philosophy. You’ll need a plan to start paying down those credit cards as quickly as possible as well. Send some time drafting a realistic budget and spending schedule so that you can have more control over your finances and stop spending money you don’t have.
(spotted at sabah-karimi)