Many people find it tough to not keep up with those around them when it comes to spending habits. If you are a spender, these tips to save money and quit spending more money than you make are vital to your financial health.
The only way to pay off debt or get ahead financially is to stop spending outside your means.
Many people don’t even realize how far outside their means they have been spending until they look at it on paper, and that’s where these tips will make it easier to manage.
It can be tough looking at your bank account and seeing a negative balance, but in order to save money it is important that you do it now before you cause any more damage.
Tips To Save Money & Quit Spending More Money Than You Make
Get to know your budget.
You can’t really understand your spending habits until you get to know your budget. If you don’t have a budget setup, it is time to do so now.
You can use my Yearly Household Budget to help you get started.
A budget is very simply a listing of your income and expenses for each month. If you are spending more money than you make, it is important to figure out what areas are the cause for financial problems.
You most likely have a few basic bills that must be covered, but that usually isn’t where your money is going.
Those little expenses are the ones that add up and keep you spending outside your budget.
Take the time to go over all of your necessary bills in your budget, then look closely at the items you are spending money outside of necessities.
This means not only gathering up your bills, but also those receipts and debit card expenses for things like the gas station, fast food, coffee shop, or even your regular trips to a favorite thrift shop.
For most who are spending more money than they make, the bulk of that expense comes from those “little” purchases throughout the month that add up fast to a big amount of money.
Once you can see where your money is going, it is much easier to stop spending so freely.
If you are still unsure, check out these 5 expenses you can cut, even though you think you can’t.
Use the envelope method.
This is one of the best tips to save money. Dave Ramsey made this method popular, and it is one of the best tips to quit spending more money than you make.
At each pay period, instead of using your debit card for expenses, designate envelopes for each of your bills and place cash into those envelopes.
When the amount in the envelope is gone, you cannot spend any more. This works especially well for those who struggle with impulse purchases.
Break down your envelopes by basic bills and extras. Categories you may consider having are listed below.
- Housing expenses: Rent or mortgage, insurance, and repairs
- Utility expenses: Water, electricity, gas, and garbage pickup
- Transportation expenses: Vehicle payment, insurance, roadside assistance, gas, and repairs
- Household expenses: Groceries, toiletries, and household repairs
- Medical expenses: Insurance (health, dental, vision, life), prescription costs, co-pays, and medical equipment
- Childcare expenses: Daycare, after school care, and babysitter or nanny
- Entertainment expenses: Satellite, cable, streaming services, magazine subscriptions, date nights, movie nights, amusement park passes, and similar
- Clothing expenses: School or work uniforms and basic wardrobe necessities for each season for each family member
- Savings accounts: Emergency fund, vacation fund, and retirement fund
- Miscellaneous expenses: Eating out, extracurricular sports, private school tuition, and girls night out
These simple envelopes can be designated on your budget and the monthly allowance placed into each.
When that money is gone, you cannot spend further. While some expenses fluctuate month to month like utilities and clothing expenses, most should be easy to account for on a regular basis.
Never pay full price.
If you are a spender, then you may already know how to bargain shop, but it is key to staying in budget and living within your means.
Never pay full price for anything if at all possible.
This is one of the best methods to continue having the things you like, but stay within your income allowances.
- Use coupons and sales when making grocery or household purchases
- Shop sale foods and never pay full price for out of season items. Stock up during seasonal sales for future use.
- Utilize savings apps and websites for finding great deals and locating coupons, sales, and coupon codes
- Utilize rewards programs at all stores you frequent. Grocery stores, convenience stores, restaurants, and even retail clothing stores all have great email or card reward systems
- Split meals at restaurants to save money
- Shop online and look at prices on various websites before finding the best deal. Price match for a better or closer location when possible.
- Buy in bulk when pricing is better overall for a product.
- Invest in a club store membership for better savings on regular household items, but do a price check ahead of time to make sure the savings are more than the cost of the membership.
- Buy used vehicles instead of brand new, and look for extended warranties.
- Shop around for better savings account options for higher interest earned
- Call any services you pay for and ask for discounts or alternate plans to lower your monthly expense
Find someone to hold you accountable.
One of the best choices for you to quit spending more money than you make is to find someone who will hold you accountable.
This is often a tough pill to swallow, but can be a necessity. Many couples are made up of one saver and one spender.
This works well to have the spouse hold you accountable, but if you are both spenders it may be best to seek another couple or friend who can help by regularly asking about your spending and savings habits.
You may also find that a financial advisor, accountant, or even a financial class could be highly beneficial to your spending habits.
By talking to an objective party outside your situation you may become more aware of the problem areas and allow them to hold you accountable.
Stop using credit.
This can be tough for many to overcome, but the credit card habit can be a crutch that leaves many feeling like they are struggling to catch up. While some things may be a long way off, like paying off your home or car, it is easy to put the credit cards down right away.
This one hurts the most, but is one of the most important things to help you stop spending more money than you make.
Credit gives you a false feeling of wealth and can quickly snowball into a much larger debt than you anticipate.
If you are struggling with your poor spending habits, these tips to save money and quit spending more money than you make are a great beginning.
It is hard to not want to buy all the great things available, but to secure a solid financial future you must stop spending outside your means and focus on savings.
Do you have any other tips to save money?