5 Steps to Control Your Spending
The idea of a budget is good in theory but if you do not learn how to control your spending, a budget is not going to do you any good. I think of a budget similar to when I try to lose weight. The only way I can lose weight is to keep track of the calories I eat and not go over my “budget” of calories. Now, if I’m tempted to eat something I shouldn’t, I can always start my diet over the next day. I can’t be the only one that does that, right? It’s a little harder to do that with money. Once the money is gone, it’s gone. It’s not as easy to “start over” the next day. So, it’s important to realize that money, your money, is finite and there isn’t an endless supply of it out there that you are going to stumble upon. You may not always be able to make more. You never know when you could suddenly become disabled or unable to work anymore.
1. Get Rid of Credit Cards
So, how do you control your spending? The first step is to vow not to go any further into debt. In order to make progress with budgeting and getting out of debt, you don’t want to dig the hole any deeper than it already is. In order to do that, you should cancel ALL your credit cards. You do not want to be to be tempted to use them. If you know you don’t have them as a back up, you will work harder to come up with ways to get what you need when you need it. Studies have shown that people spend around 20% when they use a credit card. So, if you don’t use a credit card, you are more likely to spend 20% less. You are also more likely to spend less in general if you know that you don’t have a credit card as a back up.
2. Use Cash
I have talked about using cash several times already but it is important when trying to control your spending and to stay on a budget. When you have cash, you spend less. It is harder to part with cash than swiping a card. Psychologically, handing cash over has a much different feeling than swiping a card. It’s much harder to keep track of what you have already spent when using a card. I know that I used to wonder how we spent so much over a weekend without realizing it. It may have only been $20 here and $20 there but by Sunday night, it added up to a couple hundred dollars usually. Now that I use cash, I don’t have moments like that, at least not very often.
3. Have a Written Budget
I feel like I’m beating a dead horse with this one, but when it comes to saving money, paying off debt, or not spending as much, having a written budget it imperative. If you have a budget written down, you are less likely to over spend. When you write something down, it becomes real. Whether it’s a budget, goal, shopping list, or whatever, you are more likely to keep to and achieve it, if it’s written down. To learn how to create a budget, see my previous post.
4. Have an Accountability Partner
Having an accountability partner will help you achieve your goals because you have someone to answer to if you start to stray from you goals. This person can help you remember what your goals are if you start to contemplate spending money you shouldn’t. They can help you avoid situations where you would spend money on something you shouldn’t. Hopefully this will be your spouse or significant other but it could also be a good friend or family member. You need someone to share your victories and struggles with. It will be hard to stick with the plan if you are doing it by yourself. Now, some people are natural savers so it won’t be as hard for them but the natural spenders will really struggle without someone to turn to.
5. Avoid Stores
This may seem obvious but if you want to save money, avoid stores. This includes online stores. When I got really focused on paying off debt, I avoided the mall, canceled Amazon Prime, and unsubscribed from numerous email newsletters. It’s hard to save money when you are constantly being bombarded with “good deals” and “limited time” offers. What I learned through this process is that the “deal” really isn’t a deal and it will be that same price again soon. If you avoid places that take your money, then naturally you will keep more of it. If you spend $200 so you could save $80, you still spent $200. You have to change your mindset and way of thinking if you are going to be successful with your money.