The Top 7 Tips on How to Avoid Overspending

Overspending has become a habit among income earners. It refers to spending more than you have or more than the amount that has been allocated to them.

The top reasons behind this overspending disease include the following: 

  1. Impulse buying

It is undeniable that most consumers buy products without considering whether they fit into their plans or not. In this case consumers end up buying what catches the attention of their eyes and regardless of whether it fits into their budget or not.

  1. Absence of a budget

Recent surveys by a credit counsellor Gail Cunningham suggests that most consumers do not prepare budgets for their purchases. In this case consumers do not compare their spending against a possible house budget and thus have little information on their spending habits on categories like food, entertainment and clothing. This leads to people having less control over their money, whereby money ends up controlling them.

  1. Increase use of credit cards

credit cards 2With the recent technological advancements use of credit and debit cards as modes of payments has replaced the use of cash. This plastic money bring with it “painless payment” where customers do not feel a hitch when paying using plastic money as compared to use of cash.

  1. Underestimating little expenses

Most people keep track of large expenses such as rent, car payments, and utility bills at the expense of little expenses which includes coffee, gas, dinner etc. These underestimated little expenses however add up to really huge amounts which ends up sneaking up on one’s wallet.

  1. Inadequate saving

Most people consume more than they save. Little money is saved for emergency purposes and thus in the occurrence of an emergency, the little amount that had been saved is used to attend to it.

Here are the top 7 tips on how to go about it: 

  1. Create a budget or improve on the existing budget

This entails having a hard look on your income versus your spending. You should always ensure that your income outweighs your spending at any given time.

  1. Switch to cash

cashIf you were previously using plastic money as your mode of payment, consider moving back to use of cash. You may consider using the “cash only envelope budgeting system “which helps you stick to the plan “when the money is done, you are done spending.” Get several envelopes and label them each according to your various expenses, then put the allocated amount as per each expense category. This helps you manage your funds and keep track on how much you spend in each category of expenses.

  1. Make an attempt to forget your credit card numbers

This helps you stick to your budget since you will only pay using cash and if the amount exceeds the one you have you have to recheck on the items you bought and remove the ones not included in your budget. If your credit and debit card numbers are on your heart, cancel them and apply for new ones.

  1. Choose a cheaper lifestyle

This mainly works for those who love entertainment. Consider changing your dinner reservations and parties from five star and four star hotels to a more affordable middle level standard hotels or perhaps consider to start taking up cooking as a hobby. Here you will note a major difference in your spending habits which includes huge savings.

  1. Set attainable short term goals

Over spenders are not usually concerned on how their present expense decisions may affect them in the long run. Their mindset is on “here and now” spending. You should consider having some short term attainable goals which may include the following: sticking to my cash budget for one week. Saving 20% of my monthly income to a separate fixed account, bringing food to work to avoid spending on food and sticking to your wardrobe for say one month without shopping among others.

  1. Change your thinking context on spending

Always make sure that you first debate in your mind on whether to spend your income in a given manner given the energy you spend in earning that income and the relevance of that commodity at that particular time. For example, spending $200 on a party yet you spend a whole month earning that money, this form of spending is not logic according to the right context of thinking.

  1. Always reward yourself

At the end of a certain period of time you may decide rewarding yourself after being on a too strict budget or too strict diet in an attempt to save. If your saving improves then it shows a success and you may decide to change your wardrobe with a portion of the so saved amount. Take caution not to overspend in the name of rewarding yourself.

By following the above simple tips, you will be in a position to curb your overspending habit and you will no longer be a victim of this epidemic of overspending. Try it and enjoy the outcome!

7 Ways to Save Money to Travel the World

In ancient times, traveling was a convenient way of making ends meets if the particular place one was, proved non lucrative enough for their needs. This is in contrast to recent times where traveling has become a lifestyle and a hobby for many.

Reasons why people travel

view from airplane windowThe reasons as to why people travel around the world vary from one individual to the other. For some, it is to seek for an adventurer, find themselves as well as challenge themselves while for others, the reasons may be to learn about the different cultures around the world. There are also those who travel just to get away from the daily hustles and have time for themselves to reflect on their lives.

The reasons are endless but for the individuals interested in traveling we look at how you can save money to kick-start your travel itinerary.

Ways of saving money for travel

  1. Have a clear budget and plan to implement it

Saving money to travel around the world begins with the simple steps such as having a budget and a plan to fulfill the budget. It can only be possible by one adjusting their daily lives just a little to create availability of funds for travel savings, which means cutting down on unnecessary daily expenses.

  1. Cut down on eating out

eating outAs most people actually have a mind of saving money for the future, it is wise to let your traveling money come from cutting down on those expensive coffee takes, eating out and entertainment which in turn would mean you get the funds to put on your travel saving kitty.

  1. Sell your old or unused items

Am sure every household has items that have been stored because they are no longer in use, selling of items that are no longer in use around the house can also go a long way to adding something to the travel kitty, this way you even get some extra space at home.

  1. Cut down on impulse shopping

impulse buyingCutting down on shopping is also another efficient way of saving by avoiding unnecessary shopping and sticking to a budget while going for shopping, either for groceries or for clothes. Do not buy something that you are not in real need of for example gadgets and clothes.

  1. Shun the processed foods and insist on the unprocessed ones

While shopping for foodstuffs, try as much as possible to avoid processed food and switch to unprocessed foods. They are healthier to you as well as cheaper, which means you also get to save a good amount of cash on food.

  1. Cut down on your utilities

Cutting down on utilities is another way of saving up money for travel. By this, it means not having cable and maybe using internet or library as an alternative.

  1. Take up extra jobs

Taking up extra jobs or even looking for an additional means of income on top of the normal work you do, can also be a very efficient way of adding some funds to the travel kitty.

In conclusion, saving money to use for traveling around the world requires a great deal of discipline and sacrifice. This means that you have to give up on some of the luxuries that you are used to in order to achieve this goal like they always say no pain, no gain. It is not that simple thus it requires zeal.

5 Top Tips on How to Live Comfortably on a Tight Budget

Unfortunately, most of us were not born to royal families or with a big glossy silver spoon in our mouths, we, therefore, have to toil very hard to afford a decent living. This is mostly the narrative for people across the board especially those who are on an entry level salary. Money matters have continuously proven to be a challenge for most people since they have no training or the required discipline to handle money. Living comfortably on a tight budget is very possible, it depends on the willingness of a person to stick to the main priorities and be frugal in spending.

The following are a few tips on how to live comfortably on a tight budget.

1. Track Your Expenditure

You have to account for every coin that is leaving your pocket. This can be done by writing down all your daily expenses as they happen by the minute. Many people will be surprised at how much money they spend unknowingly on things such as tips and credit cards fees. This doesn’t mean that you stop giving tips, but perhaps reduce the number of times you take food outside.

2. Budget

tracking spendingA budget helps in prioritizing your needs in the modern day world of consumerism. It also helps estimate the amount of money to be spent for different purposes and eliminates lavish spending. A budget will contribute to improving your discipline in spending your hard earned money. Some funds should be set aside in the budget for flexibility in the case something does not go as planned.

3. Re-evaluate Expenses

From time to time you need to revisit your expenditure and review it to determine if there are some things that can be changed. For example, you might be living in a bigger house than you might need, you can move into a smaller house that will save you money and still live comfortably.

4. Avoid Using Credit Cards

credit card machineSure, credit cards are very convenient as opposed to carrying a bundle of notes but what is the price for this convenience? The thing with credit cards is you don’t see the cash you spend with your sight, this has a psychological effect and causes unnecessary spending. If you cannot avoid them altogether, it is better to use them sparingly and when it is mandatory. In addition to the hidden fees on these cards, they also encourage frivolous spending on things that are not included in the budget.

5. Financial Education

mortgage formHaving some basic knowledge about money can prove crucial. Knowledge on things like inflation, interest rates, mortgage rates, insurance policies can be a defining factor in living a decent life on a tight budget. Financial education helps in making better decisions and opens your mind to new perspectives about money management.

 

These are some of the tips on how to live comfortably on a tight budget. In addition to these tips, other traits such as discipline are very crucial. People dedicate a lot of time of time and effort looking for money, and it is, therefore prudent to use that money bearing in mind of future goals and plans.