When you’re about to max out your credit card, you realize that you probably have spent more on things that you want more than what you need. It’s very easy to fall victim to the latest fad you saw on Instagram or the must-have mobile gadgets of the year. You might often find yourself looking at your bank account in remorse, and scrambling together what’s left to buy something that’s actually important. So instead of impulsively going shopping and racking up your credit card bills at the end of the month, here are a few pointers on how to get your money situation back in order. Because admitting that you have a problem is the first step towards a healthier financial life.
Set a Budget
You’re not expected to be as good as a bookkeeper, where you would need to manage your payables and receivables, daily financial entries, and monthly financial reporting. What really matters is knowing what your important expenses are, so you don’t overspend and splurge on non-necessity items. It is a good practice to make a list of how much you allocate for your monthly expenses (rent, bills, groceries) and to set aside what is left as savings. Creating a budget sets limits on what your priorities are, and shows you what to cut back every month.
You have more control of what you’re spending when you use cash. Simply because you are more aware of how much you’re spending, and you won’t have any more if it runs out. Don’t make it easy to tap or swipe your cards, as this is essentially spending money that you don’t have. By doing this you are less likely to run up huge bills at the end of the month. You could go as far as keeping your money in different envelopes for different purposes, this way you can quickly see where your monthly cash balance is at.
Hold off Big Purchases
Sometimes you need to give an expensive purchase a second thought, given time you may realize that you don’t really need it right now. Also, for big purchases sometimes you need time to compare prices and wait for discounts to happen. If you have given considerable amount of thought to the purchase then go ahead, but when it can wait it is a sign that you don’t really need it in the first place.
Forget your Credit Card Numbers
If you remember your credit card number by heart, maybe it is time to replace it, therefore you won’t easily enter it for buying things online. It will create a bit of inconvenience for you to look for your actual card, but it is for your own good. As a result, you would tend to feel discouraged to do an impulse shop whenever you see your favourite items show up online. You can go to such extent as to cancel out all of your credit cards to really minimize splurging, however owning a credit card can be useful in an emergency situation if you are quite responsible about it.
You may want to cut out the habit of an expensive night out at a popular club, classy restaurant, or going on a week-long cruise, just to keep up with your friends’ lifestyle. Going out doesn’t always have to break your budget and it won’t make your socialising any less meaningful or distasteful. Activities such as: visiting a museum, having a barbeque, hiking, or watching a movie can be healthy and fun activities for your family and friends. Who knows, maybe they will appreciate the example that you are setting.
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