If you find yourself splurging money endlessly on things that you don't need, these tips can help you stop your spending habit and become financially wise.
With different attractions and distractions all around us, it is hard to stop yourself from spending money on unnecessary things. As someone has rightly said, “We buy things we don’t need with money we don’t have to impress people we don’t like.” The first step towards helping your finances is to separate your wants from your needs. How do you distinguish between your wants and needs? Check out The 50/30/20 rule when it comes to Budgeting, to get a better understanding of your wants and needs. Once you have got your wants and needs identified you may find that at times you end up overspending on your wants where you may buy the latest iPhone, designer clothes or even try that fancy expensive restaurant. Spending more than what you earn over a period of time forces you to borrow to meet your expenses and this leads to a never ending debt spiral.
However, if you are looking to take charge of your finances, here are 7 tips that can help you stop spending money on unnecessary things and get focused on savings - 1. Sleep on it, use the 30 day rule.
If you have the urge or desire to buy something that you don't need, sleep on it instead of acting on it. The 30 day rule is the most effective when it comes to this. Studies have shown that with the passage of time you may not really have the same desire as you did initially or the product may not seem as attractive as it did. It also gives you time to research more, compare prices and make an informed decision avoiding impulse purchases. Related - Implement the 30 day rule to control your Spending Habits! 2. Figure out what triggers your spending. Psychological factors such as having a low self-esteem, fear of missing out, having a bad day or just simply feeling bored are some of the reasons which cause people to overspend. Start a hobby instead preferably one that makes money and gives you another source of income. You will start being more productive leaving you with less time for spending. Need motivation in finding a hobby or being more productive? Check out 5 ways to motivate yourself that you can implement today!
3. Compare the costs to your hourly pay.
If buying a new phone costs you a 1000 dollars, you need to compare the price of that phone to the amount you earn in one hour. If you make 25 dollars an hour, that phone will cost you 40 hours of your work pay which is equivalent to an entire work week. Comparing it to your hourly pay gives you a different perspective of its real worth. Alternatively, you can look for another source of income such as picking up a part-time job or another side hustle.
4. Create financial goals. Track your spending and set goals for yourself. There are apps that help you easily track your incomes and expenses while also setting budgets. If you are not an 'app' person, you can even get these printables to help you set monthly financial and savings goals along with tracking your actual expenses against your budget. Want these printables straight to your email? Simply subscribe to us! Related - Top 3 Finance Apps to help you Manage your Budgets and Track your Expenses! 5. Learn how to save money on a variety of things. You can avoid spending money on your wants but you cannot avoid spending money on your needs. However, you can definitely save a lot when it comes to purchasing for your needs. Look for ways and tips when it comes to saving money on your grocery, household and transportation expenses in our articles below. Related - 10 ways to Save Money on your Food & Household Expenses! 10 ways to Save Money on your Transportation Expenses! 7 ways to save money on clothing! 6. Challenge yourself to a 'No Spend Day'.
Once a week or so, have a no spend day where you do not spend on anything other than what you have budgeted for and what you really need. Forming a habit of a 'No Spend Day' can have a positive impact on your attitude towards savings, after all, just spending once can break the cycle for the rest of the day.
7. Out of sight, out of mind.
This is among the best ways to stop spending money on unnecessary things. Unsubscribe from retailers emails, uninstall apps that tempt you into making a purchase and avoid visiting the malls if you cannot resist yourself from buying things you don't need. If it is out of your sight, it is out of your mind.
Related - 7 types of budgeting for your personal finances!
How to create an emergency fund!
The Ultimate Guide To Getting Your Finances Back On Track is a book that aims to help the user in being smarter about their finances. This guide contains seven sections - Financial Goals, Expenses, Savings, Income, Loans & Debts, Budgeting, and Investments. Each of these sections explains everything you need to know about Personal Finance in simple terms. By the end of this book, you will have learned the fundamental principles that will help you in maximizing your income, decreasing your expenses and increasing your savings that will overall kickstart your process of truly building wealth.
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