December 2019Read article
Do you ever feel like you do so well with your finances during the week, but then the weekend arrives and you spend too much? Well, you’re not alone. We’ve listed five common reasons why we overspend, and how we can avoid it.
Many of us want to buy the same look as high-end bloggers who tag their outfits. What we see on our news feeds drives impulse spending and there is the constant temptation to spend money on the latest fashion, a new gadget or an overseas holiday. Next time you scroll through your news feed, try to focus on what will add value to your life in the long term, rather than chase every spending opportunity. The social media FOMO (fear of missing out) isn’t just limited to millennials; it’s proven that parents can also fall into the ‘everyone else is doing it’ mentality when it comes to spending money on their kids.
The excitement of impulse buying can be greater than any other purchase, but not always in the long-term. Impulse buying often starts before we even get to the shops – right from the moment that email is received offering 20% off or a 2 for 1 deal. An original but successful tip is to ‘sleep on it’. If, the next day, you still feel like you need to make your impulse purchase, then you probably do. If you plan to go shopping and know that you’ll likely make an impulse purchase, try setting aside some money beforehand. Impulse purchases where you pay later on a payment plan or credit card are often signs that you’re overspending.
Food takes up a large portion of most people’s budget and avoiding eating out where you can is a simple way to save money, especially if you have kids. Going out and spending $10 on your lunch every day may seem like a small amount at the time, but it’s still over $200 per month that you could be spending on something else.
Meal prepping not only saves you time, but it can work out to be as little as $3 or $4 per meal and means you don’t need to go out and buy food as often for the rest of the week. Even if you live by yourself, cooking enough to feed a family and freezing the leftovers to take to work or to eat for the next few meals will help avoid overspending.
Living beyond your means
Living beyond your means can be easy to do without really noticing. Do you have a wardrobe full of designer clothes but an empty bank account or a maxed out credit card? Or maybe your spending increases as your income does? Other signs include a credit card balance that doesn’t reduce, you don’t pay all of your bills on time or you don’t have a separate savings account. Effective tips to break this habit include re-evaluating (or creating) your budget to ensure you spend less money than you make, and to avoid relying on money that you don’t have (paying later or using a credit card).
Whether it’s buying a present, shouting a meal or attending a social event, special occasions are often costly. They can easily creep up on you and it can be difficult to afford it all, especially if they’re not included in your budget.
A tip here is to create a separate account especially for special occasions, e.g. Christmas presents and birthdays. If you make a note of your friends and loved ones birthdays a year ahead, it will help determine the amount you need to put away in your ‘special occasions’ account.