According to several studies, you are more likely to overspend when you are sad, anxious, or stressed. Shopping acts as a short-term slave while filling an emotional void, but it greatly affects your financial status in the long run. You may not control many things in life but can surely control your spending with strong determination. Read through this ArthaYantra posts to learn ways to avoid emotional overspending.
1. Avoid Plastic: Many people are uncomfortable carrying a lot of cash and tend to use plastic money. Carrying cards give the ease to overspend. Instead, draw some amount from ATM and spend the entire week. This is the best way to avoid overspending and keep your budget intact. By spending cash, you get a much better sense of spending on what really matters.
2. Cut lifestyle down to your budget: Simple lifestyle can take you a long way. Irrespective of your time, good or bad, lead a life below your means. Set aside an emergency fund worth 6 months income, to deal with any unexpected expense. Learn to live on less by building automated savings. As the time passes, you don’t even notice the money going out every month to build the savings. Rather, you get accustomed to leading a life with the remaining money.
3. Do not live to meet other’s expectations: Live for self, not for others. Focus on your goals, not neighbors. Understand what is important to you and work accordingly. You do not have to live to meet other’s expectations. If you feel the peer pressure, learn to be with like-minded people. Hang around with people with similar lifestyle and budget as yours. If you cannot, sometimes, avoid meeting colleagues or friends, make plans that do not require big payouts. Meet for a drink or coffee, not a costly meal!
4. Learn to say ‘No’: Spending money on others (especially kids) makes us feel good. But, overindulging for those we care is not a good idea, when it comes to money. There is a difference between giving for a cause and simply surprising. In the case of your kids, give some allowance and ask them to use it to buy a toy or get a treat. In a way, you are also teaching children to understand and appreciate how things cost.
5. Define your goals: Get a thorough understanding of short and long-term goals to keep your (financial) sight intact. Your money does not deviate if your goals are clear. It is a sure shot way to direct money towards meaningful causes, rather than making unnecessary spending. Automate savings to divert regular amounts towards each goal.
Create a financial plan by taking professional advice from online advisory like ArthaYantra. The process should start with visualizing and prioritizing your money goals in life. An expert can help you understand the achievability of your goals and best ways to reach them.
In conclusion, make money your tool to succeed in life and meet goals. Practice good money behaviors and do not allow your emotional void to overtake your spendings. Money behaves the way you deal with it!