Are you regularly spending more money than you earn? Then you belong to the chronically overspending group of people. There are many reasons for getting into such a behavior. Most common ones include spending addiction (also known as compulsive spending or shopping addiction), gambling addiction, bargain hunting or buying for special occasions. It is a very common phenomena and all income groups are affected of it.
Without getting a control of the spending habits, people will accumulate debts and it can even lead to severe consequences as personal bankruptcy. Ones you recognize that you are continuously overspending, it is crucial to take the following steps in order to get back under control:
Identify your personal spending triggers: find out on what occasions and for what reasons you spend too much money.
Create a realistic budget:
Separate your mandatory expenses for housing, health, insurances and food.
Give yourself an amount for recreational spending you can use in whichever way you want.
If you have accumulated debts, make a plan for paying back more than just the required minimum payments.
Make sure you put away money for an emergency fund, so you do not have to take new loans should something unexpected happen.
Commit yourself to this budget: Use only a debit card or cash for your daily expenses, DO NOT USE CREDIT CARDS ANYMORE! This way you can prevent spending too much and accumulate more debts on your credit card.
If you lack on self-discipline or if you need more guidance and control during this process, a Daily Money Manager can help you in several ways:
Discuss your situation and create a appropriate budget taking into account your spending habits, income situation and existing debts.
Control your spending by using a special type of debit card: You will get an allowance to your debit card and various spending control parameters are set on the card (restrictions for certain shops, maximum amount of transactions by merchants and others).
Guiding you through the journey by regularly reviewing and the budget and debt repayment progress.