Take control of your finances with these 8 tips to control your spending. From paying down debt to setting monthly budgets, here's how to stop overspending.
If you’re in debt, getting a hold of your spending can feel overwhelming. On average, households with at least one credit card have more than $8,000 in credit card debt, according to Debt.org. The average student loan debt stands at more than $31,000. It’s no wonder people feel crushed by their cash flow.
Luckily, there are several ways to get a handle on your money situation. Here are some strategies for applying the financial brakes:
1. Track Your Spending
A little mindfulness can go a long way. Frequently, people have no idea where their money is going, and they have no idea how all those separate purchases add up. You might be surprised by how much you're spending each month on Amazon or at your local coffee shop. Try your bank’s mobile app, or an app like Mint, to track your transactions and categorize them so you can see where your spending is going off the rails.
2. Set a Budget
If the word "budget" scares you, think of it as a spending plan. Once you’ve tried tracking your spending (in the step above), try chunking your money into big categories and see if there are places you can cut back. Make sure to include debt payments in your plan. Your bank may even provide insights on your spending and savings habits that could help.
Once you have budgets set in place, it's time to set savings goals. Check out the suite of Fifth Third Momentum® Banking services, ranging from free checking accounts and savings accounts, to learn how Fifth Third can help you set funds aside for your desired goals and financial health.
3. Edit Your Recurring Charges
Once you start tracking your transactions, eyeball how many repeating charges are happening—from subscription services like Netflix and Hulu, to box services like StitchFix, to your gym or cable or other vendors. Think about whether you’re still using and enjoying those services. If you aren’t, unsubscribe!
4. Shop with a List
It’s easy to wander the aisles and think you’ll just grab what you need at the grocery store or big box store. But the less targeted you are, the more room you have to impulse shop. (Of course, you need another cute coffee mug!) Taking the time to write a list or use a list app on your phone can keep you focused and help you spend less overall.
5. Give Yourself a Waiting Period
Consider giving yourself a "time-out" before big purchases, whether that’s 24 hours or a week. If you’re thinking of buying something that costs more than X amount, make yourself ponder the purchase to ensure that you really understand the commitment and it’s not just an impulse buy. This might keep you from getting caught up in sales excitement and buying things you don’t need.
6. Try a Spending Fast
Take a month—or several months, or a year—and commit to buying nothing but the essentials. If you don’t need it, you don’t buy it. This will likely translate to less eating out, less spending on books and entertainment, no new clothes (unless they’re needed for growing children) and no optional home décor. This can help reset your sense of what’s "necessary" spending and you’ll save money in the meantime. You can even create customized savings goals and automatically save for them with Fifth Third Momentum® Savings—allowing you to save without a second thought.
7. Make a Debt Pay-Down Plan
If you’re just slogging away, making the minimum payments on interest-accruing debt, it’s time to get serious about what needs to be done. Use an online calculator to help you make a goal—how long will it take you to pay off that big debt, and how much do you need to send to it each month? Once you have a goal, you can set up an automatic debt payment each month in that amount.
On their own, each strategy can help you better manage your cash flow. If you implement several (or all) of these techniques, you'll find that keeping tighter reins on your cash—and making it work for you—is key to financial health.