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Red Flags That You’re an Overspender and What to Do About it

Finance & Money

Posted on Friday, April 1, 2022

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Do you often find yourself wondering why you’ve run out of cash midmonth? Overspending can happen even to the most budget-conscious, but there are ways to get back on track. Use our tips to determine if you’re overspending and learn how to trim your expenses.

 

Know the signs

 

Here are some of the signs that you often spend beyond your means:

 

  • You live from paycheque to paycheque.
  • You often have to use your credit or store cards for basics (e.g. groceries and toiletries).
  • You often have unexpected expenses (e.g. takeaways and outings).
  • You rarely check how much you’re spending or don’t follow a budget.

 

How to stop overspending

 

Know your triggers

An easy way to identify them is to write down what you experience before you overspend. Examples of triggers include:

 

  • your mood – shopping when you’re feeling stressed or down
  • peer pressure – being more likely to spend mindlessly when friends invite you out
  • attractive offers – seeing promotions or sales in your email inbox
  • environment –being in a mall or store

 

Once you know your triggers, try to avoid them. This could mean avoiding shopping when you feel down, unsubscribing from retail mailers and saying ‘no’ when your friends want to go out spontaneously.

 

Give every rand a job

 

Even small purchases add up, so track everything you spend. Create a realistic budget that includes all your monthly expenses. For example:

 

  • Look at your bank statements to understand your purchasing habits.
  • Once you have a better overview, allocate money to each expense, including spending money. Include daily purchases such as your morning coffee, lunch and outings.
  • Create a budget in a notebook, or use apps such as Mint and 22seven.

 

 

Try using cash

 

It’s easy to overspend when you’re swiping a card, but it’s harder to do with cash. Here’s how to use cash for daily expenses:

 

  • At the beginning of each week, draw enough cash for different expenses.
  • Place the amount for each expense in a different envelope (e.g. petrol, coffee and lunch money, groceries, etc.)
  • Only spend what you have in cash, and if you run out of a specific expense, reshuffle your cash allocation.

 

This system can help you to practise spending only what you have and to be more resourceful.

 

Avoid using credit

 

Credit can be useful for emergencies or large purchases, but using it for everyday purchases can lead to unmanageable debt. Manage your credit card purchases by:

 

  • removing your credit cards from your wallet and keeping them locked away at home
  • deleting your credit card details from online stores
  • taking only cash with you when you go shopping (if possible)

 

Good to know

 

Learning to kick an overspending habit can be difficult, but it’s possible. Don’t be hard on yourself if you slip up and keep using these tips until you’re back on the straight and narrow! Chat to a financial expert if you need some extra help.

 

Take a look at some of our other blog posts for more budgeting inspiration:

 

 

​​The information in this article is for information purposes only and does not constitute professional advice.