Overspending is a self-destructive habit most people are guilty of.
We resolve to do better every time but somehow end up with an empty bank account by the end of the month.
If you are tired of this self-destructive cycle, here are five things you need to do to take control of your finances:
Track your expenses
It is so easy to lose track of exactly how much money you are spending when you are not monitoring your expenses. The result is that you end up broke halfway into the month.
To stop spending excessively, you need to start tracking your expenses. Make sure you put down exactly how much you are spending and where you are spending it on a daily basis.
Seeing where your money goes will help you figure out where your money goes and what you need to cut out from your budget.
Create and follow your budget
A budget is essentially a plan for how you want to spend your money. You can have a monthly one and then a weekly one but you have to make sure it’s tailored to you.
The majority, about 50%, should be for essentials like transport, food, and monthly bills. The rest of your income could be for debt payments, investments, emergency funds and your savings.
It is not enough to just create a budget. To stop spending excessively, you also have to follow it religiously. A great way to stick to your budget is to ditch your ATM cards and use cash instead. It’s so easy to overspend when you are using your card because all you have to do is take it out and that’s it.
Using cash, on the other hand, forces you to take some time and think about exactly how much money you have to spend especially when it’s not part of your budget.
Cook more, eat out less
Food is one of the things we spend the most money on. This is why you need to eat out less and cook more instead.
Preparing your own meals means you get to save the money you would have spent on fast food.