How to curb your spending habits

Do you need to curb your spending habits? Reducing your spending is a common goal, but it can be hard to find the best approach. Forming a realistic strategy and planning your next steps are certainly the best way to start, but how do you actually do that? Of course, your finances will be unique to you. However, here are some basic tips to help get you on the right track as you look to cut back on your spending!

How much are you spending?

The fastest way to curb your spending is to first find out how much you are spending. This can be a tricky and uncomfortable task for many people. You may be reluctant to pull back the curtain on your finances and take a deep dive into your expenses. Sometimes, it seems like ignorance is bliss. However, this is an essential part of understanding your current situation and next steps! You really cannot gain an accurate idea of how, or how much, you need to curb your spending without first finding your starting place. The best move is to rip off the bandage and face your spending head-on. Look at where your money is going each month, and how much you are spending on each expense. You can compare this with your monthly income to calculate what percentage of your money you save and spend. You will use this information to formulate your plan moving forward, starting with making a list of your goals!

Keep a list of your financial goals

Creating a list of your financial goals is a great way to combat excessive spending. It serves as a reminder of what you want to use your money for in the future, which encourages you to spend less in the present. This list of goals should include the estimated expense for each item, as well as when you want to accomplish it. For example, you might be planning on buying your first home within the next five years, with a down payment savings goal of $200,000. These lists can help you determine how much you want to put away each month and what it is contributing to. Putting a concrete goal in place gives you something to work toward! It also ensures your money has a purpose, and isn’t being spent on non-essentials when it is meant for your savings. 

Find a way to track your spending

It’s one thing to create financial goals to curb your spending, but it’s quite another to stick to the plan! You need to hold yourself accountable to ensure you are staying on track with your spending and saving habits. This can be a hard habit to get into, and one that is easy to break. However, it is an important part of reducing your overall spending.

After you make a purchase, find a way to track what you just bought, and how much it cost. You can do this with a homemade spreadsheet, using pen and paper, or trying out a budgeting app. Use the method that’s best for you! Try to categorize your spending into key filters like groceries, household expenses, utilities, and non-essentials. Finding the right way to categorize your spending is also a bit of a learning curve, but it lets you dig into where your money is going, and whether any adjustments need to be made. Many people find that tracking their spending allows them to better understand where they are spending unnecessarily, and how they can improve their savings elsewhere.

Give yourself room for non-essentials!

Of course, curbing your spending doesn’t mean completely getting rid of non-essential purchases! It is unrealistic to expect yourself to only spend money on the pure necessities and nothing else. Attempting to do so will likely result in feelings of shame and low confidence down the road, when you inevitably buy something you didn’t need but truly wanted. It’s important to give yourself room to treat yourself once in a while! You can still buy yourself an overpriced coffee if the mood hits, for example. When you reach a specific milestone in your saving process, reward yourself with a small outing or fun purchase! This will encourage you to keep up the good work, and to not feel guilty about occasionally indulging in unnecessary purchases. As long as you are keeping up with your financial obligations, there is no reason why you can’t reward yourself for your efforts.

Limiting your spending isn’t always an easy task. It might be a case of trial and error as you look for the perfect balance between spending and saving. If you need any guidance navigating this experience as a home owner, be sure to get in touch with your mortgage broker! We can help ensure your mortgage fits in with your next steps and matches your financial goals, allowing you to boost your savings.

If you have any questions about your mortgage, get in touch with us at Clinton Wilkins Mortgage Team! You can call us at (902) 482-2770 or contact us here.