GMR 103: Reigning in Overspending
Episode 103
One truth about personal finances is that there are always more opportunities to spend than there's money to spend. We all have a limited amount of money, and if we are to stay financially safe, we must learn to avoid overspending. In this episode of GMR, we discuss the things that cause us to overspend and provide some helpful tips to keep us from going overboard.
Shownotes
What causes us to overspend?
Having no budget.
Having a static budget - no tracking expenses option.
Not tracking expenses often enough to stay in the know.
Amazon! It’s like Candyland! Stuff you can’t live without.
Not having goals or specific enough goals.
Not defining what is important and what can wait - emergencies.
Using Credit Cards - grace period is licensed to overspend - “I’ll have enough to pay it next month.”
Not being aware of your emotions (wants and desires) or giving in to your emotions (wants).
Food - not planning meals or allowing yourself to eat out when you have food you can prepare at home.
1.Having no budget
A budget helps you plan your spending and keeps you from overspending by breaking your spending into categories.
2. Having a static budget - not tracking expenses.
3. Not tracking expenses often enough to say in the know.
Your memory isn’t that good!
It helps keep you accountable - knowing makes you think twice about a purchase.
Helps with communication - for couples.
4. Amazon!
Kohls
Target
Groupon
Home Depot
Best Buy
5. Not having goals or specific enough goals.
Having a strong goal will help shift your planning.
It acts as a check in your thinking, like a barrier you have to get over in order to proceed.
Post visual reminders of your goal in strategic places.
6. Not defining what is important and what can wait - emergencies.
Examples of true financial emergencies where it would make sense to use your emergency fund.
Job loss
Unexpected medical expenses to maintain your health
Sudden unexpected car breakdown or accident
A sudden unexpected problem with a major system in an owned house such as an air conditioner, roof or electrical system.
A family member passes away and you need to purchase last minute travel to the funeral.
A family member gets hurt and you need to take time off work to provide the necessary care.
Examples of expenses that would not justify breaking into your emergency fund.
Elective healthcare such as plastic surgery.
A great deal on a cruise vacation.
A last-minute request for you to fly to a destination wedding.
You want to replace your worn-out carpet in your home with wood floors.
Your tires wear out from normal wear and tear (this should be budgeted, not an emergency).
You really want to buy a new TV for the Super Bowl but didn’t save enough.
7. Using Credit Cards - grace period is licensed to overspend - “I’ll have enough to pay it next month.”
Go to all cash for Holidays.
Use a debit card instead of a credit card.
8. Not being aware of your emotions (wants and desires) or giving in to your emotions (wants).
9. Food - not planning meals or allowing yourself to eat out when you have food you can prepare at home.
Make a meal plan
Use your grocery store flyer to assemble that meal plan
Don’t ever go shopping without a grocery list
Learn from your overspending; ask:
Why did we spend money on this?
If it was important should we have not budgeted/saved for it? What else is important that we should be saving or budgeting for?
“Everyone overspends from time to time. Sometimes it can’t be helped; most of the time it can. What’s a tragedy is that we are doomed to repeat this behavior if we don’t go far enough to understand the why, and learn from the overspending.”
Tips for frugality:
Take advantage of all the free Holiday events.
Christmas lights
Town Centers
Large event spaces that decorate
Visit several local cities down-town area to see the decorations
Hot chocolate in the park
Ideas to lower spending:
Cut out drinking, smoking, soda, and other addictive habits…
Share a meal when you eat out, but don’t order an appetizer or dessert.
Set up a waiting period before large purchases. If you’re going to spend over $100 outside of your normal budget, then decide in advance that you will wait for 24hrs before moving forward.
Eat the food in your freezer first.
Invite your friends over, instead of going out. Have everyone bring a dish.
Make a double batch or a triple batch of your simple meals, so you can free and eat later.
Resources
Budgeting and Debt Elimination Tools
Jesus on Money by David Thompson - stewardshippastors.com