You may think it only happens to you but it’s very common for us to overspend. It could be a fashion store or a food shop but even when we have the best financial intentions we end up overspending from time to time. A common question we tend to ask ourselves when things go downhill is, “Where Did All My Money Go?”
Here are 4 reasons we may be overspending:
1. We Have A Fear Of Missing Out
A quick bite to eat with friends or a few drinks with work colleagues can be great until you realise how much it’s eating into your pocket. Humans by nature are social animals and it can be hard to say no. Even in terms of fashion, it’s easy to pick up habits of those you surround yourself with. If your sister gets a pair of boots you may start to think about boots too. After all, if we have certain things in common then we can also have the same spending habits right?
Ways To Make A Change: Share your financial goals with friends and family. If you’re saving for that house in the nearby future then let them know so they understand when you turn down an opportunity to spend. Alternatively, create a cheaper option such as going for a hot drink or go to a yoga class together. Regardless of what you’re saving for or cutting back on, the people who have your best interests at heart will understand.
2. We Take All Our Cards With Us
Debit cards and credit cards can feel like invisible money until you check your bank balance. When we use cash we tend to be aware of how much money we are letting go of because it is tangible. When you spend your cash, you will see your purse getting thinner and you become more conscious of your spending habits. “Studies show that people who pay with cash save approximately 20% over those who pay with credit and don’t feel deprived,” says Gail Cunningham, a spokesperson for the National Foundation for Credit Counseling.
Ways To Make A Change: Switching to the cash only method straight away can be hard but with time and practice it can become second nature. Start by trying it for 3 days out of the week. You may find that you don’t spend on impulse as much and you get better at sticking to your budget.
3. We Have Too Many Choices For Lunch
Starbucks. Pret a Manger. McDonalds. KFC. Tesco. Sainsburys. Marks & Spencer. The list is endless. Everyday we choose to make companies richer and make ourselves a little less off by not preparing something. Have you ever found that the food you prepare at home for lunch usually tastes better than what you buy in store? That’s because you’ve put the effort into your own food and you know your culinary skills. Nothing feels worse than paying for a meal you don’t like. Make the time to make something from home or take in leftovers. The average worker in the UK spends £5-£10 a day on lunch and works 48 weeks per year. That’s a total of £1200 – £2400 a year which could pay for a holiday, go towards a big future expense or help pay off any existing debts that need to be cleared.
Ways To Make A Change: Make the effort by making food from home, even if you start by doing it every other day it still works out cheaper!
Related: How To Be Healthy On A Budget
4. We Overlook That We May Have A Shopping Addiction
Between social media, constant sales & the desire to look good, it’s no wonder that many of us have a shopping problem. Compulsive shopping tends to affect women more than men and there is usually an emotional stigma attached to shopping. Common emotional traits of a shopping addict are depression and loneliness. It’s important we don’t buy things to heal us as the feeling of buying new things doesn’t last very long but the emotional stigma we are facing does.
Ways To Make A Change:
- Don’t pop into stores without a purpose. Going for a browse turns wants into “needs”. Steer clear of avoidable temptation. You didn’t need that jumper 5 minutes ago but now you’ve gone in the shop you feel like you must have it. Avoid roaming shops, it opens your eyes to things you didn’t want in the first place. Go shopping only when you need something. Create a list and stick to that list, even when that little shopping demon pops onto your shoulder!
- Have a wardrobe party. Go into your closet with some music and try on some outfits. You’ll be surprised at what mixes and matches come alive when you shop in your closet. This may also open up your eyes to things you haven’t worn in ages which someone on eBay or Depop could want instead!
- Set your sights on the future. Think of somewhere you really want to go. Barbados? The South of France? Brazil? Thailand? Morocco? Add some money to your travel pot (create a separate account or have a piggy bank). You’ll feel so much better knowing that you’re spending money on an experience.
Overall, all changes take time but little efforts and tips from Refined Currency will go a long way!
This post was written by Bola