If you are a spender, you need to get better at managing money. Internet retail sales per UK shopper are over £1,000 per year, according to econsultancy. This clearly shows that the UK is a nation of spenders and we need to see how we can manage our spending effectively. Spending money is all about knowing your limits and spending what you can afford to buy.
What do you spend your money on?
This is the first question you should ask yourself because what you spending money on is indicative of how you can manage your money effectively. Some people who are categorised as spenders like to spending money on hobbies that they love or clothing and jewellery. You need to figure out what you spend your money on and then you need to create a dedicated plan to keeping your savings in check.
Step 1: Figure out if you are a spendaholic
Shopaholics or spendaholics are people who like the thrill of buying things or shopping frequently. If you feel the constant need to always buy things, you might have a spending problem and this is something that you need to control. You should get help from a professional if you feel the constant urge to buy things every single day or week especially if it is out of your budget.
Step 2: Track daily expenses
It’s important to track your daily expenses of your personal finances, especially if you are a spender. For example, take a notebook and write down your daily spending for everything that you are spending. You should write down everything from your transport spending, extra food and drinks. Your daily expenses will show you your spending trends and what you need to do to edit them. If you buy soft drinks every day such as fizzy pop, you can save money by buying them at the supermarket at a discount instead of buying them every day at the local shop. Another area where people overspend daily is by being expensive coffee from coffee shops. If this is you, you can save money by making it at home yourself instead of spending money every day to buy this coffee.
Step 3: Monitor your weekly spending
Try something new today if you are a spender. Get a notebook and monitor your daily spending across seven consecutive days. Also include weekends so that you can see all of your weekend spending because this tends to be the time that we overspend more. Your weekly spending will tell the full story of how you can make major improvements to your spending. One day you might be good but you could easily overspend during other days. By monitoring your weekly spending, you will be able to be in control of your finances more especially if you like spending more.
Step 4: Know if you are the spender in your relationship
If you are in a relationship, you should know if you are the spender or the saver in the relationship. If you are the spender, you probably like going out frequently; buying new things and you might do this without consulting your partner. Spenders tend to like to go on frequent holidays as well. If you are the spender, you can make adjustments to avoid putting pressure on your relationship. Live within your means so that money does not affect your relationship at all.
Step 5: Use cash frequently
Studies have shown that it is easier to spend money on your credit card because you don’t see the money being spent. You should withdraw from the cash point and buy things in cash instead of putting them on your card. When you spend money on plastic, it is easier to convince yourself that you need a treat when you don’t. By using cash more often, you are holding yourself accountable for your spending. It is harder to slip up when you only use the money that you have physically available in your wallet.
Step 6: Don’t be tempted to buy things for friends too often
We all know how the story goes. Everyone is at the pub and it is your turn to buy drinks for all of your friends. If you are someone who loves spending money, this is the kiss of death because it only encourages you to spend more money. While it is well intentioned, for people who spend too much, it can make you feel like you need to spend a lot of money to keep the friends or social circle that you have. Instead, if you like buying your friends gifts or treats, do this once in a while and write it down as an entertainment expense. This way you can still be with your friends without breaking the bank. You can also hang out with your friends without spending money, so that you can still enjoy their friendship without having to spend money to acquire it.
Step 7: Create new goals on how to save money
If you are a spender, you need to teach yourself how to save money. You can start small and you should definitely create a list of goals that you want to achieve by saving, instead of spending money. You should not feel like you cannot have anything you want, but look at the money as a way to empower yourself to achieve the goals you want. For example, if you want to go on a holiday break to the US, you will need more money than if you were going on holiday to Berlin or Paris. You need to budget accordingly for where you want to go to ensure that you can make it happen. Goals need to have deadlines in order to happen. Start off with daily financial goals, then go to weekly goals and then make monthly goals in order to reach the levels that you aspire to.
Learning how to manage your money if you are a spender is something that takes hard work but it is not impossible. By following these simple steps, you can learn how to incorporate saving and budgeting into your lifestyle.
Don’t forget to read the previous post if you are a saver!