Yahoo Finance 4 Ways To Stop Spending All Your Money — And What To Do Instead
Even if you earn a lot, poor spending habits could leave you living paycheck to paycheck, with nothing remaining to invest or save. Along with hurting your financial stability and goals, overspending puts you in danger of accumulating debt and straining relationships. But reconsidering your financial habits and priorities can help.
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Here are simple things you can do to stop spending all your money.
Wealthy people know the best money secrets. Learn how to copy them.
Make and Stick To a Spending Plan
Unless you have a money plan, it’s easy to end up spending all your money without progressing with your financial goals.
To control your spending, put together a budget with all your monthly expenses, income and regular contributions toward goals like savings, investments and debt payoff. The budget should balance out so that you’re not in the negative. Otherwise, look for expenses to reduce or eliminate, or find ways to bring in more cash.
To be successful, you must stick to your money plan. Consider a money management app for logging expenses and comparing them to your budgeted amounts.
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Avoid Credit Cards
Credit cards are risky if you want to avoid spending more money than planned. First, it’s very convenient to pull out the card and justify buying something when you don’t have to handle or count out physical cash. As the charges accrue, you can also waste your money on high interest and potential fees.
Dave Ramsey recommends just using cash because you’ll more easily feel the impact of your spending, and you’ll avoid fees and interest. If you can’t part with your credit card, use it only for essentials and pay it off each cycle — on or before the due date, to avoid late fees.
Be a Mindful, Frugal Shopper
While skipping the credit card and being diligent with budgeting will help, you must also shop mindfully. This includes never shopping without a list, and buying only what is on the list. You should differentiate between wants and needs, look away from impulse buys and give yourself time to consider big purchases.
Look for deals to further stretch your money. This can be as simple as checking the store’s ads, finding coupons and buying generic or bulk products. You should also check for reward programs through your favorite retailers to get special discounts or money back.
Automate Saving and Investing
While it can improve your finances and prevent debt, spending wisely doesn’t guarantee you’ll make progress with investment and savings goals. Even if you have extra cash, you might feel tempted to just buy something you want.
Setting up automatic investing or savings plans can keep you from spending all your money. You might deposit a planned amount from each paycheck and use the rest for expenses. As a bonus, you could earn interest, dividends or gains from your set-aside cash.
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This article originally appeared on GOBankingRates.com: 4 Ways To Stop Spending All Your Money — And What To Do Instead
