It’s not uncommon for people to spend more than they should at Christmas, just like it’s not uncommon for people to overspend across the course of a year, if they haven’t been budgeting or not budgeting enough. Many people live payday to payday, however, this could be improved with a little budgeting and planning.
Image by Gerd Altmann from Pixabay
Although you don’t really want to think about budgeting at this time of the year, this is the best time to planning for your financial future. Making changes such as buying used cars, switching your energy providers, and cutting back on luxury items, are just a few of the ways you can reduce your budget and become more financially secure.
Let’s have a look at some of the ways you can help yourself do this below:
Keep Track Of Your Spending
The same principle applies to your budget as when you count calories to restrict your diet and make sure you don’t overindulge in food. You are more likely to pay attention if you keep track of what you are spending. If you have no idea where your money is going, how are you expecting to improve your financial situation and save more? Try to track your spending for around 60 days and then you can start to create a budget. While you are trying to get used to living with a budget it is also a good idea to track your spending.
Make A Budget
No one likes the idea of living on a budget, however, it is one of the best ways you can get your spending under control. Setting yourself limits not only helps you stop overspending, it also helps you to pay your bills on time, every time. There are many different options for budgeting, therefore, you should be able to find one that you like to use. Although it may not seem fun, going struct with your budget is the best way for you to track exactly what you ‘need’ to spend.
Think About Going Cash Only
You can make as many budgets as you want, however, don’t stick to them and they aren’t really doing anything. Going cash only for the majority of your spending can force you to stay within a budget. Studies have shown that cash-only people spend less than those who spend only using their card. A great way to do this is to make use of envelopes and split your money at the start of the month so you know exactly how much you have got to spend.
Freeze Your Credit Cards
Avoiding credit cards can be essential when you are trying to get your spending under control. However, you may not want to get rid of your cards completely, this is because you need them in order to show a positive credit history. Plus, it sometimes makes sense to make large purchases on a credit card, is gives you time to pay them off if you can’t afford the item right away. However, if you want to get your spending under control, it is best if you stop yourself adding to your cards until you are able to be confident you can afford the payments each month (more than the minimum too).
Cutting down on your spending can be difficult, especially when you are used to living pay day to pay day, but, the sooner you start to live by a budget, the sooner you will start to notice your savings go up.