Organizing Your Finances: Strategies to Combat Overspending and Over-purchasing

Shop like you mean it! It is easy to succumb to overspending due to Instagram clicks. Impulse spending can become a habit with “56% of consumers saying they are more influenced by social media images and videos when online shopping now than before the pandemic.” If you are concerned about your spending habits, understanding your spending patterns and creating a system for tracking purchases can help. Here are some practical tips to regain control of your budget and create financial stability.

Becoming aware of overspending

How do you know that overspending is becoming a problem? Are you having trouble paying your monthly credit card? Have you not been able to save for emergencies or financial goals? Are you feeling uncomfortable with the number of packages arriving at your home?  Is your home filled to the brim with no space to organize? These are all ways to become more aware of your overspending and overpurchasing. Financial apps make it easy to track your spending and share data on where you are spending too much.

Understanding Your Spending Patterns

The first step in addressing overspending is to understand your spending patterns. Download your expenses into a spreadsheet from your debit card, credit card, and bank statement. Review your expenses over the past few months by categorizing your spending into essential and non-essential categories.  This data is most valuable in learning what you have been purchasing. This will help you identify areas where you may be overspending unnecessarily.

Setting Spending Limits

Now that you are aware of your purchases, it could be time to set limits on your spending in specific areas. Consider setting spending limits for certain categories of expenses such as clothes, personal care, or beauty. One way to set spending limits is to set a specific amount to spend on a category over a time frame. You can carry a limited amount of cash for these purchases or track your expenses with apps such as Every Dollar and Spendee.

Avoiding Impulse Purchases

Impulse purchases are a common culprit of overspending. Before making a purchase, implement a waiting period. That waiting period could be a pause before purchasing such as a rule to wait 24 hours or even a week before making a non-essential purchase. This delay can help determine if the purchase is truly necessary or just an impulse.

Keeping out of the cookie jar

It is easier to follow a diet without cookies at home. Remove social media that prompts you to impulse purchase online. When it is more difficult to purchase, it creates a pause to think more about that purchase.

Making a game of saving

If you find yourself consistently overspending in certain areas, explore alternative ways to save money. This could include only shopping sales, using coupons, and buying generic brands. Small changes in your spending habits and rules about purchases can add up to significant savings over time.

Tracking your finances and combating overspending requires discipline and diligence, but the rewards are well worth it.  Like any change, it takes time to gain momentum. By understanding your spending patterns and implementing rules for purchases, you can regain control of your finances and work towards a more secure financial future. Remember, it’s always important to manage your resources more effectively.