Are you struggling to make ends meet? Do you feel like no matter how hard you try, the money isn’t enough at the end of the month? If so, you must take control of your finances and start living within your means.
It doesn’t matter how much you make – if you’re spending more than you’re earning, it can be difficult to survive financially. If you want to take control of your finances and stop spending more than you make.
Let’s look at some of the proven ways to stop spending more than you make so you can take control of your financial future.
1. Assess Your Current Financial Situation
So the first thing you want to do is to assess your current financial situation. This means looking at all of your
- Income sources
- Debt payments
- Fixed expenses such as a mortgage, rent, electricity bills, car payments, etc…
- Monthly discretionary spending, etc…
Once you understand your current financial state, you can create a plan that helps you get out of debt and live within your means. You might be surprised that you’re already spending less than you make!
2. Create a Budget
Creating a budget is the best way to get your financial life in order and stop spending more than you make.
Start by tracking your current income and expenses, then break them into categories such as
- Utilities, etc.
Once you have all of your expenses broken down into categories, create a budget that helps you stay within your means while allowing some wiggle room for fun activities.
When you follow a budget, you can find gaps that can be cut to save money and put that money toward reaching your financial goals. Make sure to revisit this budget each month and adjust as needed.
3. Shop With a List
How often have you gone to the store without a list and finished up with unnecessary items in your cart? You are not alone – almost everyone who shops without a list spends more than they need.
A great way to stop spending more than you make is to shop with a list and stick to it! Before heading out, list the items you need, their prices, and any coupons or discounts available.
Shopping with a list helps you stay focused on your budget and ensure you don’t overspend. The goal is to avoid impulse purchases and stick to the items on your list.
4. Use Cash Instead of Credit Cards
Credit cards are extremely useful financial tools that allow you to easily purchase items out of your budget. But if you’re trying to stop spending more than you make, it’s best to use cash instead of credit cards.
When you physically hand over the money for something, it feels far different than swiping a card and having someone else handle the bill. With cash, you can see the money leaving your wallet, which can help to keep you accountable and stop you from overspending.
Use your credit card only in emergencies such as medical bills or home repairs. Otherwise, use cash to pay for everyday items, and you can stick to your budget.
5. Stay Away From FOMO
FOMO, or “fear of missing out,” is a common problem that can cause you to spend more than you make.
Before making a purchase, ask yourself if the item is necessary and if you can truly afford it. If it is unnecessary and cannot be afforded, don’t buy it! Just because everyone is doing something doesn’t mean you have to do it too.
By avoiding the “fear of missing out” spending, you can save money and keep your finances in check.
6. Create an Emergency Fund
Emergency funds are a great way to ensure you have enough money to cover unexpected expenses. Emergencies can occasionally show up at your doorstep, and the last thing you want is to get caught.
You will end up borrowing money, or debt, or using your credit cards to pay for it. Creating an emergency fund will help you avoid this and ensure that money is available when needed. Your savings will be untouched, and your debt won’t increase.
Start by setting aside a small amount each month, and eventually, you will have enough saved up to cover any emergency expenses that may come up in the future. Aim for at least 4-6 months’ living expenses in your emergency fund.
7. Spend Time Learning About Money Management
If you want to take control of your finances, you must learn the basics of personal finance management. It’s not rocket science – all you have to do is spend some time researching and understanding the basics.
Learn about budgeting, saving, investing, debt management, taxes, insurance, and retirement planning. It’s not enough to know the basics – you have to learn how to apply them in your own life.
Once you understand these concepts and practice them regularly, you can make smarter financial decisions and avoid overspending. This will help you reach your goals faster and give you peace of mind.
8. Change Your Lifestyle and Live Below Your Means
Many people miss that you can’t spend more than you make if your lifestyle costs more than your income. Living below your means is a great way to stop spending more than you earn.
For example, if you want to take control of your finances, you can’t eat in a restaurant regularly. Or you can’t buy trendy shoes or dresses every weekend. The key is to find the balance between your needs and wants and only spend money on what you need.
Live simpler, save more, and change your lifestyle to match your budget. You’ll soon start seeing the results of this change in your finances. With a little bit of effort, you will be able to manage your spending and live within your means easily.
So there you have it! Now you know how to stop spending more than you make and take control of your finances. Everyone has different needs – depending on your lifestyle, you will have to adjust the tips mentioned above to make them work for you. So don’t wait – take control of your finances today!
I’m Steve. I’m an English Teacher, traveler, and an avid outdoorsman. If you’d like to comment, ask a question, or simply say hi, leave me a message here, on Twitter (@thefrugalexpat1). Many of my posts have been written to help those in their journey to financial independence. I am on my journey, and as I learn more I hope to share more. And as always, thanks for reading The Frugal Expat.