Spending habits are the real culprit for you to have fallen behind repayments. Many people find at the end of the month that they have almost no cash even if they are not living paycheque to paycheque. This is because you spend money more than you should.
Many people think that they are not earning enough money and this is why they are falling behind repayments. However, the fact is that they overspend money. No matter how much money you earn, you cannot be in control of your money if you do not stop overspending and for that you need a budget that works for you.
However, budgeting is not just a plain solution. Even if you make a budget, you may be tempted to spend money on a thing that you do not need and eventually you will end up running out of money.
Of course, budgeting cannot be just a solution when it comes to managing your finances. Here is a three-week financial plan that you can improve your spending habits.
How does the three-week financial plan look like?
You will have to cut back on your overspending if you want to be in control of your money. Of course, it can be challenging and it is, you will have to promise yourself to stick to the plan. Here are the rules:
Buy only what is essential
Overspending is the result of temptation. When you go to a store or mall, you get tempted to buy even those things that you do not need, and this is when you slip up and start hurting your budget.
This is why it is crucial to stick to the plan that you do not have to buy things that you do not need. Make sure that you buy only things that are urgent and that are necessity.
Pay with cash only
If you use credit cards to make a purchase, you will end up buying more than you can pay. For instance, if you use only cash to make a purchase, you will have an idea of how much money you have that you can use to buy a commodity.
However, if you use a credit card to make a purchase, you will never have an idea of how much you can actually afford.
Never forget that you will have to pay back your credit card bill within the interest-free period and if you run out of money to pay it back on time, you will eventually fall into debt. This is why it is suggested that you pay cash to make a purchase.
Make a spending journal
The best thing to make your three-week financial plan successful is to keep a journal of your spending. Make sure that you record each transaction so you know how much money you have spent and how much more money you can spend.
Make it last till three weeks
You do not need to stick to this plan throughout your lifetime. The period of three weeks is enough to control your overspending behaviour. Once you get it in your stride, you can manage to avoid overspending.
How can you make this plan successful?
You have got to know the rules of this three-week financial plan, but now you should know what you can do to make it successful.
Know the difference between needs and wants
To make this plan successful, you should know the difference between needs and wants. Needs are necessity. Rent is the necessity. Wants are not necessity. You can avoid these expenses. You make such expenses to make you please yourself, for instance, buying a smart watch.
However, there are some expenses that are hard to differentiate between needs and wants. For instance food is the necessity but eating out at restaurants is not the necessity. It is just a want. You can prepare meals at your home.
Take it as your responsibility
You should take it as your responsibility because it will encourage you to stick to your plan. Most of the time people think it is just like a formality and they do not bother to stick to it.
If you think that it is your responsibility and mandatory to cut back on your overspending, you will be able to do it easily. You should think that it is about a period of three weeks and it should not be difficult for you to stick to this plan.
Why should make this three-week spending plan?
If you know how it can benefit you in the long run, you will be able to stick to the plan with more comfort. Here is why you should make this plan.
- You will be more aware of your spending habits. Since you will be tracking your every penny, you will be in more control of your finances.
- You can avoid relying on the use of credit card. Although it is a bad idea to take out guaranteed loans when you need money to fund an urgent expense, you should avoid borrowing to fund your regular expenses. If you cut down on overspending, you will be able to manage all of your expenses smartly.
- You will be able to deal with your temptation. As soon as you see something that seems to you interesting, you immediately buy that without thinking about your finances, but by following this three-week financial plan you can manage to control your temptation.
The final word
If you are looking to get rid of your habit of overspending, you should make a three-week financial plan. It is not a long time, so you can easily stick to the plan.
Make sure that you use cash for all of your purchases and do not spend money on things that you do not need. This three-week financial plan can make it easy for you to get rid of overspending habit.