We all have “bad” money habits. We overspend on lattes or on stuff we don’t need—or our problems are somewhere in the middle. We have the power to alter our behaviours. It takes some thought and insight, as well as a dive into our psyches to hear what our “bad” behaviour is trying to tell us. Here are some suggestions for reducing needless spending:
- Pay with cash for everything you buy. Paying with cash causes more psychological distress than paying with a credit card, according to a study. As a result, cash-paying customers spend less than those who use credit or debit cards. Leaving your credit and debit cards at home and only making purchases with cash will also help you avoid overspending.
- Make your own meals at home. Restaurant dinners, takeout or delivery meals, and paying for lunch rather than brown-bagging are among the top areas for wasted spending, according to the Ladder expenditure survey. Cooking at home is a fantastic method to cut costs on food. Certainly, you might enjoy a restaurant meal now and then, but home-cooked meals can help you save money on necessities like rent and utilities—and they’re usually healthier as well.
- Take a break before making a purchase. Take a moment to consider and ask yourself these questions whether you’re shopping for a new TV or a new pair of shoes: Is this a requirement or a desire? Can you really afford it if it’s a desire? What is the real price? Will you be unable to deposit funds into your savings account as a result of this purchase? Will you end up with greater credit card debt as a result? Consider deferring your purchase for the time being if the answers to any of these questions cause you to reconsider.
- Refuse to succumb to the allure of a bargain. While it’s always tempting to save money, don’t buy something just because it’s on sale. Stick to buying only what you truly require. And if that item happens to be on sale, take advantage of it.
- Examine your subscriptions and memberships. According to the Ladder poll, people pay too much per month for memberships and subscriptions, such as cable TV, video streaming services, and gym visits. Even cancelling a few of your memberships and subscriptions might save you hundreds, if not thousands, of dollars per year.
- Make a budget for your family. A budget can assist you in keeping your income and expenses in check. Monitoring the money that comes in and goes out gives you a bird’s-eye view of your finances.
- Make a larger payment than the minimum. While making only the minimum payment on your credit card bills each month may seem enticing, doing so can result in a significant amount of interest charges. So, how do you avoid paying interest? If at all possible, pay off your debts in full each month. Paying more than the minimum payment each month will save you money on interest and help you pay off your debt faster.
- Put yourself on a credit-card-restricted diet. Consider setting a stringent monthly limit on how much you can charge on your credit cards to reign in your spending. Your credit card information should be removed from your computer. If you have a propensity for overspending, the convenience of online shopping could be a major factor. This will make one-click purchases impossible, potentially reducing your impulsive buying.
- Make a financial plan. A budget allows you to keep track of your spending and savings while also helping you to reach your financial goals.
Taking the steps outlined above can help you reduce your unplanned spending to some extent. Determine the change you wish to make and keep it simple and minimal at first. Make a commitment to yourself to do it, as well as a system for tracking your progress. Promise not to be critical of yourself, but to go over the steps again, gaining new insights and understandings to help you accomplish the change you want. You may break negative money habits to some extent by identifying the root causes and taking deliberate action.