If overspending is an addiction, it can be a difficult habit to overcome. Investigating self help programs can be helpful for some individuals. An international program called Debtors Anonymous has developed a 12 step program to assist people with overspending addictions. Whether or not you have a legitimate overspending issue is up to you to decide, but there are several no nonsense tips and advice on overspending that we can provide that just might help.
Cutting Back on the Luxuries
It is not just the middle class that is getting hit by some of the cut backs that are occurring. The upper class executives are also paring back on luxuries. As one upper class executive put it, “we had to give up luxuries, not necessities.” Eating in more, and developing family time rather than going to movies are simple ways to pare down on expenses.
Money can even be saved by investigating new store brand products rather than buying popular name brand items. Some products can have a saving of 30%. Purchasing non essential items, concert tickets, and name brand clothes can be postponed or rethought to reduce overall spending.
Pay Down Your Credit Card Debt
After getting a handle on your overspending, calculate and prioritize your debts with a payment or debt calculator. The goal is to put any spare change you have toward paying down your outstanding credit card bill. Making more than the minimum payment each and every month is critical. If this is not possible make a payment as much as you possibly can.
If you have more than one card with outstanding debt choose the card with the highest interest rate to pay down first. Paying down each month requires discipline and focus, but chipping away at the card with the highest interest rate provides a sense of gaining control of the mounting debt. After successfully unloading the card with the highest debt, begin paying off the next card with the highest interest rate.
Keep One Credit Card
Once your card is paid off, resist the temptation of running it back up to the maximum by cutting it up, cancel the account and start paying in cash. It is okay to have one card with a low annual percentage rate (APR) to use in emergencies. Things such as renting a car or making travel arrangements are difficult to do without a piece of plastic.
Using a debit card is a good alternative to a credit card and a bank card is one way to avoid high interest credit card debt.
Make and Follow a Budget
Creating and following a budget is one way to understand where the money is going. To make a budget outline each month what major expenses need to be paid. These may include big ticket items and other necessities such as:
• Rent or mortgage
• Car payments
• Oil and heating/cooling bill
• Gasoline and other car expenses
• Telephone (cell and landline)
Also include other incidentals such as daily coffee and special treats. As you regularly record the expenses, a pattern can be determined and areas to trim costs can easily be identified.