Saturday, July 16, 2016

Magical Financial Formula - Eliminate Overspending Forever

For many people, spending a few dollars more than anticipated rarely seems like a big deal. However, for those where overspending is a problem that happens over and over, the results can be disastrous. 

Bank accounts can be wiped out, credit cards maxed out, and credit ratings can plummet. Rather than be left scrambling for money each month, it's best to focus on ways to eliminate this habit. While this may sound impossible, the fact is overspending is a learned behavior that most people are very capable of overcoming.

Create a Budget

If you want to take a big step toward eliminating overspending, create a budget and be prepared to stick to it every month. To get the best results, gather all your bills to see how much you owe each month. 

Afterwards, add up your pay stubs and figure out how much you're making, then see if there's any way you can put some money into savings.

Pay with Cash

For many people who overspend on a consistent basis, paying with cash can make a tremendous difference. 

Rather than paying with a credit card, paying with cash makes it much more obvious just how much is being spent at the moment, and also gives you a feeling of loss by watching your money disappear. By making you think about where your money is going, spending can often be curtailed.

Cut Up the Credit Cards

In extreme cases of overspending, many people take the drastic step of cutting up their credit cards. In doing so, they are unable to use them for any reason, forcing them to use cash for purchases or to avoid some purchases altogether. 

While this may sound extreme, the fact is it's often a great first step toward getting your credit repaired. Sometimes, a Lexington Law review can be helpful to learn more about what to do in such a situation. By eliminating the chance to make one impulse purchase after another, bills can begin to be paid on time, which over time goes a long way in repairing your credit.

Choose Cheaper Entertainment Options

If you've gotten used to spending plenty of money on entertainment, you might need to start changing your plans in order to save a few bucks. For example, if you've been eating out several nights per week, it's a good idea to go out only once or twice instead. 

And if you've been having a weekly movie night at the local theater, try staying home and catching a movie on television. By implementing these changes, you'll be surprised as to how much money you'll save.

Reward Yourself Now and Then

Even though your goal is to eliminate overspending, that doesn't mean you should never have any fun. Once in awhile, it's fine to have a meal at a favorite restaurant, play a round of golf at your favorite course, or even taking a short vacation. 

By learning how to balance your spending in an appropriate manner, you may find you can reward yourself more than you thought possible.

Set Short-Term Financial Goals

One of the best ways to make progress when it comes to eliminating overspending is to set several short-term financial goals. For example, if you're trying to put aside money for a savings account, try putting aside 10 percent of each paycheck. 

Or, if you think you've been spending too much money eating out, try brown-bagging it to work for a week. When you challenge yourself with these goals and then succeed in meeting them, you'll be better able to set and meet long-range financial goals.

While none of these tips individually may seem like a magic formula, putting them all together as part of your overall financial plan can bring you success that does indeed seem magical.

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