What triggers overspending?
We’re all familiar with spending more than our income but we may be less aware of the emotional triggers behind our overspending. Understanding how to manage these emotional triggers can help us to control spending more effectively.
Putting your finances on track
Even a small amount of spending will add gradually add up if it’s part of a regular spending habit. That’s why tracking how much you spend down to the last penny is essential if you are serious about getting and keeping your finances on track.
Make money visible again
Using a debit card is very convenient but you might lose track of how much you’re spending. So, if you have difficulty budgeting, are spending more than you earn and are always low on funds, you may want to return to cash for a while.
Using cash may help you to pause and make a conscious decision each time you think about buying something which may help control your spending.
Set short-term financial goals
Goal-setting is a powerful way of motivating you to manage your money. For example, your short-term goal might be to save £1,000 towards a holiday over 6 months. This means you’ll need to save about £5.50 a day. Setting short-term, medium-term and long-term goals will help you to put your money where your hopes are and give you the encouragement to cut spending to achieve your goal.
Learn How to Budget Money
Not having a personal budget or a money plan is a key reason why people struggle to stop spending money. A budget is made up of two parts – your income and the amount of money you spend on a weekly, monthly or yearly basis.
So review your payslips, current account statements, credit card statements and receipts to understand exactly how much money you have and where it goes. You can use a simple budgeting sheet to guide you; there’s one in our Managing your money brochure below. Track your money for 3 months to get a very good snapshot of your spending habits.
The information contained in this article has been prepared by Bank of Ireland for information purposes only. Bank of Ireland believes any information contained in the article to be accurate and correct at the time of publishing.