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How to Stop Overspending: Breaking the Habit

It can be pretty tough to live paycheck to paycheck while trying to resist the urge to splurge. Sometimes, the reason can be low income and sometimes it can be your spending habits.
How to Stop Overspending: Breaking the Habit
Overspending is not new for people in the United States. According to a report, an individual spends around $143 a week more than his budget on average. The amount turns to $7,400 yearly. You may think that it is just one coffee or one pizza, but each time you add to this amount, it is going to weigh more on your pockets at the end of the year.
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It can be pretty tough to live paycheck to paycheck with a constant fear that you may run out of money. Sometimes, the reason can be low income and sometimes it can be your spending habits. You can do side hustles to increase your income but what matters the most is that you control your spending. That’s why it’s essential to stop overspending without cutting down on the fun.

Sometimes it is the thing that you don’t need and you still buy and sometimes it is just that you find it convenient to buy it from a place then to search for a better deal. Whatever your reasons may be, here are 6 amazing ways to stop overspending money.

Cut down on unnecessary subscriptions 

According to research, an average household in the US incurs an expense of $47 every month for subscribing to streaming services. If you add that, it comes up to $564 annually. You may have a lot of subscriptions but may not even be needing them.

For example, you may not be reading that fancy fashion magazine that you have subscribed to. Also, would you need all the streaming services at the same time? The answer is no! So, set your priority and cancel subscriptions that you are not using anymore. That’s how to stop overspending on what you don’t need. For those who would like to take extreme measures, read all about taking the no-spend challenge.

Say no to eating out 

We don’t mean that you have to stop enjoying your life, but you can definitely limit your spending. An average US household spends around $7,200 on food. Bifurcating it further, the takeaways and dining out cost $3,154. That is quite high! 

You may be thinking that I am just gonna have one coffee or just wanna have one pizza, but each time if you add this amount, it is going to weigh more on your pockets at the end of the year. You can opt for a $5 meal plan, can use cashback or bonuses to pay your bills, and eventually save money. You can also save money on groceries by buying them from the store that offers loyalty discounts and coupons or from any online shopping site that gives a good discount, cashback, etc.

Review insurance rates

Insurance is necessary and you cannot opt out of having it. But what you can do is find insurance that fits your pocket and caters to your needs and gives you the best interest rate. You will always find cheaper options which are also good. You can save hundreds of dollars each year if you look around and search for a good insurance policy. So do that!

Drive less 

Well, I’m not suggesting that you stop going out to places but you can reduce the usage of cars. You can choose public transport which can save you up to $10,000 a year. If you don’t like to use public transport, you can also choose an office carpool. Even riding a bicycle is a good choice. It also saves the environment along with saving your money.

Limit credit card use 

Credit cards make it easy to get money whenever you need and that is why they can create a higher debt. But if you see the other side of the coin, you will also get cashback or reward points but that is only if you pay your bills on time. 

So you should develop a habit of paying your credit card bill each month in full, in order to avoid penalties and interest rate charges. There are credit cards that also charge as high as 24% in interest. It is better to avoid this and reduce the outflow of money each month. You can also take advantage of credit card balance transfers in order to reduce paying for interest.

Capitalize on shopping rewards

This does not mean that you should shop just for getting rewards but it is always good to pay attention to what advantages you can get by shopping. Some examples include buying things by using a specific debit card that can give you a discount or can give you cashback on filling gas. 

First, look out for such offers and if your cards are eligible for such rewards, take advantage of the same. You can also earn cashback for using some applications when you shop. Saving money or spending money is all about developing financial habits which can come with time. But just trust the process, trust yourself, and have strong willpower, not to overspend.

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Author

Picture of Devanshee Dave

Devanshee Dave

With over 4 years of experience in financial writing and a master’s degree in mass communication & journalism, Devanshee is currently preparing for her CFA (Chartered Financial Analyst) exams. In her spare time, she likes to dance and learn about cosmology, astronomy and anything that can expand her knowledge from the big bang to the big crunch.

Editor

This page is purely informational. Beem does not provide financial, legal or accounting advice. This article has been prepared for informational purposes only. It is not intended to provide financial, legal or accounting advice and should not be relied on for the same. Please consult your own financial, legal and accounting advisors before engaging in any transactions.

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