Johannesburg- Most people overspend here and there on a shopping trip but if overspending has become a habit it may be time to curb your “retail therapy”.
Neil Thompson, Head of Product and Customer Value Proposition at African Bank, warns stress is one of the leading triggers of overspending. Other triggers can be an emotional life event, social media, retail tactics, boredom, the ease of access to online shopping and credit cards.
“Many people see spending money as a stress reliever and a way to cheer themselves up. The question to ask though, after buying the new shoes and electronic gadgets, is how will you feel when your credit card repayment is far more than you can afford?
“If you are constantly overspending on things you shouldn’t be, debt and savings are likely to go out the window and you may even fall behind on monthly financial commitments, like rent or your car payment.”
If you are struggling to get a grip on overspending, Thompson advises taking an honest look at what you earn compared to what you spend as a first step. This can be a major wake-up call when it comes to curbing your spending habits.
6 more ways to stop overspending:
- Create a budget. This will involve comparing your income and expenditure, creating a spreadsheet, adding up each and every till slip and putting money into a savings account each month.
- Cash is great but a security risk these days so rather consider opening multiple pocket accounts and transferring money to those pockets. With African Bank’s MyWORLD account for example you can open up to 5 Pockets, each with its own debit card. You can even name each pocket, for example, school fees, petrol, groceries, etc. to manage your finances better. Transferring funds into these pockets is really simple and so convenient.
- Recognise what is driving you to shop for non-essentials. By taking a moment to breath, think and re-evaluate, you could rethink your decision. At least, give yourself the chance to sleep on it.
- Tell your friends and family you are on a “money diet”. It can have the same effect as when you tell people you are on an eating diet – it helps you stay accountable for your spending.
- Think about tomorrow by setting short-term goals to help you overcome overspending and save money instead. These goals should include putting at least 15% of your income into a savings account, putting money into an emergency saving account and sticking to your budget.
- Reward yourself once a month for a job well done in managing your money better. As long as the reward is not over the top, there is no harm done. Consider it your financial “cheat meal” and enjoy it without guilt knowing you have your spending on track again.
“The irony of overspending to make yourself feel better is that the reality of your bad money management will make your feel even worse,” Thompson concludes. “The best stress relief is to know you are taking care of tomorrow by being mindful of your spending today.”
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