Why am I unable to quit spending money?” – This is probably a question that we have all addressed ourselves at some point. It’s much simpler to spend money in today’s digitally enabled world—many times, all it takes is one click to complete a transaction—and before you know it, you’ll have been overspending on all those tiny purchases that have built up.
We all have monthly financial commitments, such as direct debits and repayments, but it’s the unplanned or smaller purchases which can snowball and lead to overspending. Whilst you of course don’t want to be worrying about your finances every time you go to spend, you also don’t want to be worried about checking your bank account. With that in mind, let’s take a look at 3 ways that you can avoid overspending.
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Understand What You’re Spending Money On
Getting an idea of what you’re spending money on can help you to better understand your finances and identify the areas where you might be overspending. Many different tools can help you to break down or better manage your money, which displays your spending in different ways, such as categories like travel, shopping and food, or that can help you to budget and split your money into more manageable chunks. By doing this, you might identify areas where you could save money, or find that you have outgoings which could be reduced.
Pay Off Debts Where Possible
Debts are one of the things which can eat into budgets and can be one of the biggest outgoings to factor in. To help you take control of your finances and spending, you should look to prioritise paying off debts that you have, such as DRO and credit cards, and, if you can, avoid adding to them with small or unnecessary purchases.
If you are always tempted to use your credit card or overdraft to pay for things such as meals out or things you don’t need, then this can just add to your overspending next month. Gaining control of your finances and learning to manage your debt is one of the best ways that you can avoid overspending. If you are struggling to meet debt repayments, or would like further advice on how to deal with your finances, then it’s always a good idea to speak to a financial debt advisor.
Set Up Alerts
One of the best ways to be more aware of what you’re spending and when is to set up alerts from your bank, so that when you make a purchase over a certain amount, such as £5 or £10, then you will need to approve it or simply be notified of it. Some apps will also allow you to set limits for certain categories, such as shopping or on food outlets. Then, if you are approaching or have exceeded the limit, you will then get an alert to let you know. One thing to remember with this approach is that everyone spends money differently and we all spend more than we mean to sometimes – and that’s ok. It’s about managing your money so that it doesn’t happen more often than not.
