In today’s generation, money spending has become a habit. Most of them have become addicted to spending money. Many of them are spending without thinking about the product usage and requirements. With the facility of paying later on apps and credit cards, the spending habit has drastically increased. Many people later realise that they are spending too much and sometimes they cannot afford to pay the bills on the due dates and all these happen because of the money addiction problems.
Why to stop Money spending addiction?
The money spending addiction will have a larger impact on an individual’s life. People who have an overspending habit get into debt troubles. The amount of money payable to debtors will increase and they cannot afford to pay. People who get addicted to spending money cannot get out of it easily but it is very important to find some way out. If money spending habits are not controlled then an individual will keep falling into debt trap and it will be very difficult to come out of debts later. The following are the tips to stop money spending addiction.
- Find out what you want to change
- Plan for a Debt Free life
- Ask your loved ones for help
- Access your spendings
- Analyse your spending habits
- Alternative spending
- Consider those affected by excessive spending
- Debt repayment plan
- Budget with goals
- Honesty
1. Find out what you want to change
It is easy to decide that you want to change your spending habits but it is also very important to find out what are your necessities and luxuries. You have to find out what your luxuries are and differentiate it with the lifestyle. You can skip your luxuries but you cannot skip your necessities. It is very important to find out what you want to change and decide upon your choices.
Finance related decisions that you make will have a direct impact on your lifestyle. Analyse your choices and ask yourself about your spending habits and you will certainly get a clearer picture of your useless spending habits.
2. Plan for a Debt free life
To have a debt free life is everyone’s desire and if you are trapped in debt and still continue to have a habit of spending money then you will always wish to have a debt free life. To have a debt free life, plan to pay off your current outstanding debts. You may have to plan for debt consolidation and debt settlement options with your lender. It is better to live a debt free life than the one with a debt burden.
Related- Is Debt Consolidation a good Idea?
3. Ask for help
People who know you better will understand you better. Talk to your loved ones if they can give you the best advice to break your spending habit. It is suggested to take advice from those who spend wisely each penny. They can advise you with the honest truth and you can achieve your goal to change your habits. When you have got addicted to spending money it is difficult to come out of it but if you have support and advice then you can get rid of your habit.
4. Access your spendings
Access your spendings by preparing a chart of your monthly expenses. When you access your spendings then you will know where you are spending your money more and where you are spending less. Unnecessary spendings are the main reason for debt traps. Do not get enticed by the offers and the deals and make purchases which you do not need.
5. Analyse your spending habits
When you analyse your spendings you will get to know where you are buying more and with this you can curtail your spending. Some people spend more only on cosmetics and others will spend more on groceries. By analysing your spending habits you can get to know where the problem is underlying and then you can take appropriate action accordingly.
6. Alternative to spending
Sometimes you can find alternatives to spending by borrowing things from your neighbours and friends. When you are in need of something, instead of spending you can also get them on rent/hire. This will not only help you fulfil your needs but also reduce your major financial expenses.
Related: Bad money habits to avoid right away
7. Consider those affected by excessive spending
There are many people in society who spend more on luxuries than required and get into debt trap. You can learn lessons from their life and this will help you to make the right decisions and also make you cautious about spending.
8. Debt repayment plan
A debt repayment plan will help you to reduce your debt. By diversifying your monthly budget towards repayment of debt will give you satisfaction that debt amount is reducing. Put a hold on your expenses and concentrate on clearing your debts. Fulfill your monthly necessities and divert your money towards paying debt.
9. Budget with goals
Having long term goals and the aim of achieving them will help you to work towards the goal. When you are past your spending addiction you can divert your funds towards this long term goal. Break your goals into smaller goals and achieve them. If you have a goal of buying a villa, then you can have a budget plan towards accumulating money. A goal oriented budget will help you to overcome your spending addiction.
10. Honesty
Being honest with yourself will help you to know where you actually are and then you can plan where you want to go in your life. Accept your mistakes with yourself, you need not publicly tell what your mistakes are but being honest with yourself and faithful helps you know more about yourself. You will know your true financial situation. The number of payables, networth of your bank balance and your future receivables.
Take away
To stop money spending addiction is not a one day task. Follow the practice and think before you spend. If you are in a debt trap then you have to follow the process by cutting down all your credit sources and increasing your income generating sources to clear the existing debts. Have an aim of achieving bigger financial goals which will increase your net worth this will help you to increase your assets.
About the author
Vinay Kumar Goguru is a finance professional with more than 8 years of diverse experience as a researcher, instructor and Industry work experience with both public and private entities. Prior to MyMoneySouq, he spent 6 years in Berkadia, It's a commercial mortgage banking company. He has a "Doctoral Degree in Commerce" and two master's degrees with a specialization in Finance, one as Master of Commerce and other as Master of Business Administration. He has written several articles on personal finance, published by different International journals. He loves traveling, reading and writing is his passion. He has a dream of writing a book on his favorite finance topics.
