You just got paid or received monthly funds, but immediately used up? Spending money without a plan is a hard habit to break. What's more, wasteful behavior makes debt more and more difficult to save. Stopping the habit of wasting money is not easy. However, you can break this habit and start saving by taking the following steps.
Step
Part 1 of 3: Recognizing Your Money Habits
Step 1. Think about how much you spend each month on hobbies, activities, or buying certain things
Maybe you enjoy buying shoes, eating out, or just haven't been able to unsubscribe from beauty magazines. It's a good thing to have fun buying things or doing activities you enjoy, as long as you can afford it. Write down all the activities or items that you usually buy every month and then put those expenses into the discretionary expense group.
Ask yourself: Am I in the habit of wasting money on discretionary fees? Unlike the fixed costs that you have to pay each month (such as rent, utility fees, and other fees), discretionary fees are not mandatory and are easier to eliminate
Step 2. Review your expenses for the last three months
Pay attention to credit card usage, bank account transactions, and cash purchases you've made so you can see what you're using your money for. Keep track of every small expense, such as buying mineral water, snacks, or paying for parking.
- You may be surprised to find out how much you spend on a weekly or monthly basis.
- If possible, study spending data for a year. Financial consultants will usually analyze expenses for a year before making recommendations.
- The percentage of discretionary fees can be very large when calculated from your salary or benefits. By taking notes, you can determine what costs need to be reduced.
- Keep track of how much money you spend on wants versus shopping for necessities (for example, drinking coffee at a cafe versus buying groceries for a week).
- Calculate the percentage of fixed costs and discretionary costs. The amount of fixed costs will always be the same every month, while discretionary costs can change.
Step 3. Save the shopping receipts
This method makes it easier for you to record the amount of expenses for certain purposes every day. Instead of throwing out shopping receipts, save them so you can keep track of exactly how much money you spend on items or food. If at the end of the month you feel that you have wasted money, you can determine exactly when and where you use this money.
Reduce cash spending and get into the habit of using a credit or debit card as long as the transaction can be traced back. As much as possible, you should pay off credit card bills every month
Step 4. Use the financial budget program to evaluate expenses
With a financial budget program, you can calculate the amount of expenses and income for a year. This way, you will know how much money you can afford to spend in one year based on your budget.
- Ask yourself: Are my expenses greater than my income? If you pay your rent every month with savings or use a credit card just for fun, you're spending more money than you earn. This method will increase debt and reduce savings. Therefore, start being honest with yourself in using the money you receive each month and make sure that you use the money according to your income. In this case, you will have to prepare funds to pay monthly fees and save.
- Use a budget app to keep track of your daily expenses. Download this application to your device so you can immediately take notes every time you spend money.
Part 2 of 3: Adjusting Your Spending Habits
Step 1. Make a budget and execute it well
Determine all the major expenses that you must pay each month to ensure the availability of funds. The main expenses are made to pay for:
- Rent and utilities. If possible, you can ask your roommate or partner to pay for this fee. The owner of the boarding house may be willing to pay for the water and you only pay the electricity bill each month.
- Transportation. Do you walk to work every day? Riding a motorcycle? Ride the bus? Riding someone else's car?
- Food. Budget funds to buy food for one month.
- Health. You must have health insurance to anticipate incidents or accidents because it will be much more expensive to pay for it yourself than having protection. Look for information on the internet to get the best insurance premiums.
- Miscellaneous needs. If you raise animals, this means that you have to calculate the amount of money to buy pet food for one month. If you and your partner want to go out together once a month, budget for it. Count all the costs you can think of to avoid spending money without a clear purpose.
- If you have to pay off debt, record it in your budget as a major expense.
Step 2. Make a plan before you go shopping
For example, buying socks to replace the holes or buying a cell phone because your phone is broken. Planned shopping, especially for discretionary expenses, can prevent you from making spontaneous purchases. Focusing on one main item when shopping can be a good way to budget before you leave.
- Before shopping for groceries, read the recipe first and then make a list of the items you want to buy. Once you get to the store, you only need to buy what is listed on the list. Plus, you already know exactly how to use each purchased ingredient.
- If you're having trouble sticking to a grocery list, buy online. That way, you can find out the overall price and what items you buy.
Step 3. Don't be lured by the discount
This way of shopping is indeed very tempting! Sellers rely heavily on customers who are lured in by discounts. Try to resist the temptation to shop just because there is a discount. Big discounts can mean a lot of spending. Instead, there are only two things you should consider when shopping: do I need this item? And, is the price of this item within the budget?
If the answer is no, then it's best to just leave this item and save your money on what you really need, not what you want, even at a discount
Step 4. Don't carry a credit card
Bring cash within budget for one week. That way, you are no longer interested in buying things you don't need if you run out of cash.
If you have to bring a credit card, think of it as a debit card. This means, every rupiah you spend through a credit card must be paid off immediately every month. Using a credit card as a debit card keeps you from being rash when shopping
Step 5. Get in the habit of eating at home and bringing lunch
Eating out can be very expensive, especially if you have to pay IDR 100,000-IDR 150,000 every day, 3-4 times a week. Reduce the habit of eating out to once a week to only once a month. Calculate how much money you can save by buying groceries and cooking them yourself. This way, you will appreciate the favorite food you buy on special occasions even more.
Get in the habit of bringing lunch to work every day, instead of spending money. Set aside 10 minutes before bed at night or in the morning before leaving for work to prepare lunch
Step 6. Do a shopping fast
Test your shopping habits by buying only what you need, not what you want, to use for 30 days or a month. Calculate how little money you spend in a month by focusing on what you need instead of what you want.
This method helps you determine what you really need and what you want. Apart from essential necessities, such as paying rent and buying food, you have reason to consider a gym membership fee a necessity because it keeps you healthy and fit. Or, you may need regular weekly therapy for back pain. You may spend money to meet these needs as long as it is budgeted and the funds are available
Step 7. Learn how to make your own through a DIY site
DIY, which stands for Do It Yourself, can help you learn new skills and save money. There are many blogs and guidebooks that will teach you how to make expensive items on a budget. Instead of spending money on expensive art or decorations, make your own. You can also make other items as needed with the available budget.
- There are many other ideas for making household items that you can learn from the sites Pinterest, ispydiy, and A Beautiful Mess. You can also recycle existing items and make something new yourself, instead of spending money on new ones.
- Do your own chores and other household activities. Get in the habit of cleaning your own house, instead of paying for someone else's services. Invite all family members to sweep the yard or water the garden.
- Make your own household cleaning materials and beauty products. These products are usually made from ingredients that you can easily get at the grocery or grocery store. You can make your own laundry detergent, all cleaning products, and even soap to make it cheaper than store prices.
Step 8. Set aside money to achieve your life goals
Work towards your life goals, such as traveling to South America or buying a house, by setting aside some money each month as savings. Remember that the money you save from not buying clothes or eating out every week will fulfill a more important life goal.
Part 3 of 3: Getting Help
Step 1. Recognize the characteristics of compulsive shopping behavior
People who like to shop compulsively usually have difficulty controlling their spending habits and tend to follow their emotions in spending money. They will continue to shop until they feel tired and keep shopping. However, compulsive shopping and spending money usually makes a person feel worse about himself, rather than feeling better.
- This compulsive shopping habit is more experienced by women than men. Women who behave like this usually have several shelves of clothes with price tags still attached. They wanted to go to the mall with the intention of buying one item, but came home with several grocery bags filled with clothes.
- This habit can sometimes overcome depression, anxiety, and loneliness during a long vacation. Someone who is depressed, lonely, or angry may also behave in this way.
Step 2. Recognize the signs of compulsive shopping behavior
Do you shop because you want to have fun every week? Do you always spend more than you make?
- Do you ever feel like you're in a rush when you're shopping and buying things you don't need? You will feel “stressed” when you buy a lot of things every week.
- Be careful if you have a lot of credit card debt or multiple cards.
- Maybe you will hide the things you buy from a family member or partner. Or, you will overcome your shopping habit by working part time to cover your expenses.
- People who experience this problem tend to be in denial and usually don't want to admit that they have a problem.
Step 3. Consult a therapist
Compulsive shopping is a form of addiction. Therefore, you need to consult a professional therapist or join a support group in order to find a solution to overcome this problem.
