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4 Insightful Tips to Control Your Spending Habits

4 Insightful Tips to Control Your Spending Habits

Are you in debt? Are you always struggling to save money for the things you really want? Well, you’re not alone, many people all over the world are facing the same issues right now. No matter how hard they try, it’s never enough.

What’s curious is that even when they get a promotion (and earn more) and come across a big sum of money, they quickly return to the same situation. Why is that? The problem is not how much money you have, it’s your spending habits. It’s easy to think you’ll fix your problems by earning more money, but the truth is that you just have to spend wisely.

It’s easier said than done, I know, but if you’re reading this you’re willing to change and that’s the first step. I wish I could give you a quick, simple and easy solution, but there’s no such thing. It’s hard work, but it’s not impossible.

1. Ask Yourself Why

To be fair, you always should be assessing your purchases, but it’s even more important to do it when you’re about to buy something. You see, impulse can make us do things we’ll regret as we only think about the consequences afterwards.

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When you ask yourself why you’re buying something, you’re immediately reflecting about it. “Why am I buying a new (insert item/experience)?” The majority of the times you won’t find a decent reason for this question.

Why are you buying a new smartphone? Is there something wrong with the one you have right now? Why are you buying a new pair of jeans? Are the old ones broken? Or are you worried about what others might think if you repeat an outfit? Why are you going out (again)? Are you really going to have a nice time or are you afraid of being lonely? And not finding Mr/Miss right?

The point is: once you understand the underlying reason for your spending habits you’ll see that nothing will change by buying something. There are other ways to “solve” your problems without breaking the bank.

2. Have a Budget

Whether you have a daily or weekly budget, it doesn’t matter, as long as you have one. Ideally, you should never go over budget, but if you do, it’s not a problem, as it’s hardly the reason for having one in the first place. When you have a budget you’re forced to think about every purchase you make. So all of a sudden it’s not a matter of choosing, picking, paying and leaving – it’s a decision that’s going to affect something else.

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It’s even better to tie this budget to something that’s meaningful to you. It could be a long due trip to an exotic place, a replacement of the malfunctioning car or to reduce your ever increasing debt. When you start looking at the broad picture, you’ll stop your meaningless purchases in order to keep within budget and achieve whatever your goal is.

3. Don’t Spend Money That’s Not Yours

How many people do you know with massive credit card debts? Or people who ask for a bank loan as soon as they finish paying the last one off? It’s hard to say “no” to money that’s readily available, but it’s a mistake to believe that money is yours.

Credit is great if it’s used with a purpose and a well-defined plan – like starting a business for instance. It’s also a cushion to fall back on in case of an expected emergency. However, if you’re not in dire need, you should never use credit cards and overdrafts frivolously, or you end up paying the (hefty) consequences.

So if you’re getting to the end of the week or month and you feel you might not have enough money for rent, is it wise to buy a new top/t-shirt on your credit card? Shouldn’t you wait until you have the money to pay for it? The concept is simple: if you don’t have the money, don’t spend it. The more you get yourself in debt, the harder it is to get out. And when you add up all the money you’re paying in interest throughout the year, you’ll quickly see the problem you have.

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4. Be Willing to Change

One of the main reasons why people carry on with their financial problems is because they don’t want to change their lifestyle. You know that one of the definitions of insanity is: doing the same thing over and over again and expecting different results.

How many times do you eat out a month? How many times do you order a takeaway? Do you know how much money you could save by cooking at home? And before you say you cannot cook, remember that with practice you can achieve (nearly) everything. Do you drive to work? Do you need to? Have you considered selling your car and cycling to work? With services like Uber, Blablacar or Co-wheels/Turo, you’ll always have a car available to you.

People always dread a change of lifestyle; it seems like it’s not only a matter of comfort, but it’s also related to pride. A person might choose to get in debt and go to the gym with their friends, instead of exercising at home and looking like they don’t have money.

At the end of the day, you and you only know the problems you have. If you think your spending habits are not really affecting your life, I suppose there’s not much to worry. However, if it’s getting to a point where if you don’t take action things might start to fall apart, then you have to take it seriously.

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Do you have problems managing your money? Have you found a solution? Share in the comments below.

Featured photo credit: Alejandro Escamilla via hd.unsplash.com

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Guilherme Ribeiro

Freelance Writer

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Last Updated on March 29, 2021

Life Insurance: A Secure Way To Protect Your Future.

Life Insurance: A Secure Way To Protect Your Future.

Life is a journey full of ups and downs. No one can actually predict what might happen the next moment; there are times where the happiest moments do not even take a second to turn into the gravest. Planning for your future can help you face such unwelcomed but irrepressible situations with much ease. We all want to make every memorable event of our life more special and to cherish all those moments happily and worry less, you must financially plan your future. But no one has control over life and death. Who would wish to see his family suffer in his absence? Insurance hands over the financial jeopardy of life’s happenings to an insurance company.

Importance of getting a life insurance

No one has control over life and death. Nobody would like to see their family suffering in an absence, and that’s why many people recommend life insurance. A life insurance plan is one of the best ways to secure the future of your family, even against those financial troubles after an untimely demise. These plans are safe and credible, and you could trust them for your family’s better future.

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On the other hand, a life insurance policy is a contract between a company (insurance provider) and policyholder in which the insurance provider ensures to pay a certain amount of money to the nominated beneficiary in case of the policyholder’s death during the term of the agreement. There are different types of insurance plans, and it is important for you to know the benefits of those plans such as a funeral, medical or some life expenses provided they are mentioned in the agreement.

Choosing the right insurance plan

If you’re about to select an insurance plan, you should consider some important factors:

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  • The time at which you start investing in a program and the number of family members you want to get insured. Obviously, a married man with two children has different needs compared to a single one. The number of persons who are dependent on an individual also varies from person to person.
  • The next thing you need to consider is you and your family needs. What are your child’s dream, your retirement plans, for how long would your dependents need financial support, any personal injury, etc. And do not forget those events or situations that will surely demand a huge sum of money.
  • The next thing one must consider is your current income. You should preferably choose a plan which you can afford.

Now you must be having a pretty clear idea of how to choose the best plan for you. Further, you should also compare various plans offered by different companies and numerous sites available online that help will you to compare them.

Differences between life insurance plans

Here’s a short brief of some plan categories you can choose according to your needs:

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  • Term Insurance Plan – You have to pay once, and your nominee gets the paid money under your misfortune demise. It ensures a person for a fixed time. If you survive the policy period, you do not get your premiums back.
  • Whole Life Policy – This plan continues for your lifetime. Under this, the policyholder has to pay regular premiums, until their death.
  • Endowment Policy –  In case the individual dies during the tenure, the beneficiary gets the amount assured. If the person survives the policy tenure, they gets back the premiums paid with other investment returns along with several other benefits.
  • Money Back Policy – In this a portion of the money invested is returned to the investor at regular intervals. If you survive the insurance term you get the entire amount back; else the beneficiary receives the entire sum assured.
  • ULIPs – These are the life insurance plans that offer you future security plus wealth creation options.

Many people do not opt for whole life policy and endowment policy because of the high amount of money you need to pay, while others may prefer to opt for these if they have a high life expectancy. Surely you will find the best one for you.

So what are you waiting for? Plan for your future and live a happier and carefree life today.

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Featured photo credit: aryehsampson.com via aryehsampson.com

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