Trying to keep your spending in check is a lot harder than it sounds, especially since it is so easy to make purchases these days. All it takes is a couple quick clicks of a button, and you can purchase anything from groceries to furniture to a new car. Consumers frequently get into situations where they overspend and can’t live comfortably because their bills are too high.
Here are a few tips to help you control your spending.
- Review Your Bills – You may be able to save a significant amount of money just by reviewing your monthly bills in detail. For instance, many times cable companies give you a trial period of premium channels when you first order their service. That trial period may have come and gone, and you find out you’re now paying for those premium channels. This is also common with mobile phone plans as you’re often given trials of many features you may rarely if ever, use. You could be spending money you didn’t even know about.
- Make a Budget – Everyone should utilize a monthly budget. If you don’t currently have one, it will be eye-opening to see where all your money goes each month. People are often surprised to see just how much small purchases, such as coffee in the morning, add up and put a dent in their savings plan.
When making a budget, it’s important to note that people often overestimate their monthly income and underestimate their monthly expenses. Make sure you list out all your expenses, even “fun money” for yourself. Also, be sure to factor in those unexpected expenses that may come up each month.
- Use Credit Cards Wisely – With today's purchasing convenience, it is easier than ever to rack up credit card debt. If you are unable to pay off your credit card each month, you may want to refrain from using it unless there is an emergency.
A good rule of thumb is never to spend more than 25% of your available credit. For example, if your credit limit is $4,000, never have a balance over $1,000 on your credit card. This helps limit your spending and keeps your credit score higher.
- Make a List – Before you go shopping, make a list of what you need and stick to it. Research shows that those who make lists before shopping tend to save money. When you go in blindly, you end up buying items you don’t need and therefore spend more. This is especially true around the holidays. Bonus Tip: NEVER go grocery shopping when you’re hungry!
- Beware of Impulse Shopping – Impulse shopping can wreak havoc on your wallet. When shopping for big purchases, find what you want and then walk away and give it some thought. Go and browse other items, compare prices, and check your budget. By walking away and putting some thought into your purchase, you may decide you don’t need that item, or maybe as a result of waiting, you find a cheaper option.
A good rule of thumb is to wait 72 hours (3 days) before you make a large financial purchase. This allows the initial impulse/excitement to wear off, and you’re able to make a better financial decision.
Understanding your spending habits is essential to keeping your finances in check. By utilizing these tips, you’ll be able to save money and keep your finances in order.
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If you have questions on budgeting or need assistance getting the most out of your accounts, stop by or give us a call at 800-343-6328.
Each individual’s financial situation is unique and readers are encouraged to contact the Credit Union when seeking financial advice on the products and services discussed. This article is for educational purposes only; the authors assume no legal responsibility for the completeness or accuracy of the contents.