There are many reasons why people can, consciously or unconsciously, overspend. Some common examples include: having easy access to credit, misusing credit cards, spending in order to feel good and (more often) spending without a plan and a budget. To reduce the level of overspending, one needs to first determine the following:

  • Source of overspent money: Do you overspend by dipping into existing savings, from borrowing money from others or by using credit card?
  • What do you overspend on: Do you overspend on necessities or extravagant items? Do you overspend on items related to your social habits or on impulsive but unnecessary buys?
  • When do you tend to overspend: Do you tend to overspend when you are due to receive your salary, at the end of the month, or at certain occasions?

Determining the above factors is vital in order to start the process of controlling spending. Once you become conscious of our overspending behaviour, and how and when it occurs, you can then review them in light of the budget that you have drawn up. Here are some steps that can be taken to correct one's spending behaviour:

  • Minimise reliance on credit card;
  • Every time you withdraw cash from the bank or an ATM make sure you view the balance so you are consciously aware of your available balance;
  • Make an effort to pay your bills first during the week of receiving your salary;
  • Make a shopping list for all necessities needed in a month;
  • Allocate a budget for entertainment and fund and stick to it;
  • Plan to have an amount of cash that will be saved every month, even if it is a small amount.
‹‹ Back