How to avoid overspending

You may say setting up a budget and tracking your actual expenses was challenging. Today, I’m going to ask you to go one step further and to take a step towards staying within your budget and avoiding overspending.

We are approaching Ramadan. Muslims will be celebrating this holy month with their friends and families. Special meals will be cooked or Muslims and non-Muslims enjoy delicious Iftar meals in restaurants. It’s a time when it’s so easy to spend just a little bit more on food and eating out, new clothes, presents for Eid and so on.

Let’s have a look at how you can stay within your budget and avoid overspending. Here are 10 great tips to help you succeed:

Shop with a list. You’ve heard it before and you’ll read it here. When going to the supermarket, take a list with you. Supermarkets are designed to trap you into impulse buys. “Oh, look, the fruits just look so fresh and tasty. I’ll need to try them.” “Hey, I get extra loyalty points if I’ll buy this one.”

Before you’ll leave your house, write down what you actually need. If you’re planning your meals for the next week, review which ingredients are required and which ones you already have. Purchase only what you need to stay within your grocery budget and avoid food waste.

You can keep such a shopping list on or near your fridge. Every member of your household can write down what they’ve used up or what needs to be bought. It saves a lot time when you’re writing the actual shopping list and you remember everything.

Ask for discount and rebates. Purchasing big ticket items like a new cooker or TV can throw off your budget, if not planned for accordingly. As you are shopping around for these items, enquire for any special promotions. Some shops may give you a percentage discount while others may extend the warranty or throw in other freebies. Be careful when comparing the offers. Are these freebies worth you buying the product from that store if the price is still much higher than at a different shop?

Use 2-for-1 vouchers appropriately. If you aren’t already using discount schemes like the Entertainer or Time Out City Card, consider whether they’d be helping you to stay within budget. Vouchers can be quite misleading. When you’re using them, your brain is tricked into thinking you’re saving money. What if you hadn’t bought the product or eaten at this restaurant in the first place? Are you only using the voucher to save move, but wouldn’t if you didn’t have the voucher?

Avoid the sales. It’s so tempting to buy a piece when it’s on sale, isn’t it? Rather than rushing to buy it, ask yourself: “Would I buy this item if it wasn’t on sale?” If the answer is no, then you’re not saving anything! Leave it in the store and move on.

Use cash. You’ll see when and where you’re spending your money. Spending money with your credit card appears easy. You don’t know that effect and can carry on like nothing happened.

Leave your debit and credit cards at home when you’re going shopping next time and only use cash. Have you noticed how much harder it is handing over your hard earned money than your debit or credit card?

Set up an envelope system. This approach goes back a long time and seems to be work for a lot of people. Look at your budget, get some envelopes and write the name of each budget category on one envelope (for example, first envelope is for utilities, second envelope is for food, third envelope is for clothes). Take out the cash you’ve budgeted for each category and stick it into the appropriate envelope. Whenever you’re going to need to buy something, take the cash out of the specific envelope for this item. As you’re going through the month, you’re seeing how much money is still available for this category.

Watch your utility bills. If you’re leaving a room, turn off the lights. Depending on your home, can you also turn off the air conditioning for that room? If not, turn up the AC by a few degrees to save more money. For example, if you’ve now set it to a chilling 19 C, set the AC to 21 C. Let your washing machine run for full loads only. If you have a half load, check that you have a special half load function or wait until you have more laundry. Dewa has created this great collection of energy saving tips. Check it out here! These tips not only help to conserve our resources. They will also help you save money and stay within budget.

Stay in more often. Invite your friends over for a fun dinner. We seem to have forgotten how to entertain at home. A home cooked meal and spending quality time with your friends can be even more fun than eating oysters and caviar when going out.

Activities to help you stay within your budget when entertaining at home are limitless. Arrange for a pot luck dinner, where everyone brings one dish but doesn’t share what it is until they arrive. Host a barbeque in your garden and ask friends to contribute by bringing a salad or dessert (more coordinated than the potluck). Cook with your friends. Play board games. Watch the latest season of your favourite show with your friends. Be creative and paint, craft or create art at home. Have your book club over.

Give up your expensive vices. We all have something that may be a bad habit or a behaviour. For some it’s smoking, for others it’s a lot of partying or a fast food diet. If you don’t want to change your life, consider at least adjusting your expensive vices to stay within your budget and to avoid overspending. If your vice is an unhealthy one like smoking, check out this calculator that shows you how much money you’ll save by giving up smoking!

Finally, go on a no-spending challenge. This can be a week or a month where you only buy the bare necessities like your rent/mortgage, utilities, basic groceries (great way to clear your pantry) and transportation. Instead of dining out, you’ll cook at home and entertain at home. You’ve already seen plenty of ideas in a previous paragraph. The longer you try it, the more you’re realising the resources you have at home and creative you can be. It’s not easy as I know from my own experience, yet, it’s such a great achievement!

I hope that these 10 tips will help you make that first step towards staying within your budget and avoiding to overspend. It’s not always an easy road, however, the rewards are outstanding and you deserve this financial peace of mind.

What do you do to stay within your budget? What tips can you share to the other readers of Organised Life and Mind? I can’t wait to read your story below!

Until next time,
Agni