Building savings is a herculean task, especially if you are not earning a lot of money. However, some experts believe that it has not always had to do with the number of your earnings. According to surveys, even those people who are making a lot of money struggle to have a considerable size of savings.
Your spending habits are a real culprit. You often spend more than you should, and in the end, you take money out of your savings, which you build for unforeseen expenses, to meet your regular expenses. Some people are prodigal, while others are the victim of impulsive purchases.
As you see a store with a tag of 50% sale, for instance, you immediately rush to it without asking yourself if you actually need it. It seems you are saving half your money, but actually, you are draining your money. Impulsive buying habits quickly drain your savings, and you end up with small loans in Ireland to meet your regular expenses. This may ruin your budget entirely. Here are the tips to stop spending money if you are looking to build savings:
- Identify your weaknesses
If you are geared up to cut back on overspending, you need to identify the areas where you spend the most. Look at your bank statement to see where you have spent the most money. It could be apparel, takeaway, etc. You will likely find a couple of unnecessary things where you spend.
After identifying them, you should work on them. For instance, you should start cooking food at home. It is a cheaper alternative to a takeaway. Buy apparel only when you need it. Do not fill your wardrobe with unnecessary stuff.
- Create a budget
An ideal budget is a key to stopping overspending. Make it a compulsory move to stash away a fixed amount of money for unforeseen expenses. It can be 10 to 20% of your salary based on the limit of monthly expenses and how much you earn. Your spending budget depends on average monthly expenses that should include the scope for discretionary expenses, which could be up to 20%.
If you are still left with some of your money, you can transfer it to a savings account. Budgeting can tell you how much you have spent at the end of the day. Use an app that records every transaction in one place. It allows you to set a monthly spending limit and notify you about it if you are on the verge of overspending. Your budget will work only if you make the most of it.
Whether you use a manual spreadsheet or an app, it is not a magical device that knows how much money you have already spent. You will have to record everyday expenses so you know how much money has gone out of your pocket. At the time of buying anything, look at it so you know you are not ruining your budget.
People with impulsive buying habits do not bother and end up taking out online personal loans in Ireland later. Even if your budget allows you to make that purchase, you should ask yourself if you actually need it. How is it going to benefit your lifestyle?
- Shop with a list
Most people end up overspending on groceries, and impulsive buying is not always the reason. When you walk between aisles, you notice several things lying on the shelves. You quickly pick and put them in the basket. It is likely that you do not need all of them. For instance, at home, you may have spices, ketchup, etc… Having a shopping list with you makes sense, so you do not buy things not mentioned in the list.
Before you go to the grocery store, you should search your kitchen, cellar and refrigerator to see what items are yet to be consumed. Do not mention them in your list. Make sure you stick to the list. Suppose you are fighting against the habit of an impulsive purchase. In that case, you should unsubscribe from all shopping email newsletters and put the shopping apps into a deep sleep, so you no longer receive notifications.
- Utilise leftovers
Wastage can also affect your finances. Studies have reported that people waste a lot of food every year that could be fed to over ten million people. Leftovers should not be thrown. Instead, you should pack them and use next day. If you do not want to eat it as you are bored of having it, you can refrigerate it for a couple of days and then use it. Make sure you consume it before it goes off.
Food wastage means wasting money. Instead of relying on the restaurant, you should try cooking food at home. If you are a working professional, you can cook a couple of dishes, especially those that take time to cook at weekends, so you do not have to stress about cooking every morning. You can keep a day or two for light food that gets cooked in no time. Try to make simple dishes like veggies, salad and chicken. They will fit your budget even if you are living paycheque to paycheque.
- Do not get tempted to discounts
You will likely find some items on sale and discount offers in a grocery store. It is vital to stick to your list. When you see you can save some money, you pick it up, but you should not if it is not on the list. You are actually blocking your money. Chances are you do not consume it before the expiry date, and it goes off. Entertain discounts only when you need something that is a part of sale discounts.
The final word
You will have to stop overspending from growing savings. This can prevent you from borrowing money to meet regular expenses. However, if you still need some money, borrow from genuine and honest private money lenders in Ireland so you get attractive interest rates and do not fall into the trap of scams.