Can it really be achieved? Stopping any sort of spending when it’s hardwired into you is an incredibly difficult thing, but sometimes it takes a shock to the system for us to realize that our personal finances aren’t as good as they once were. You find that, after a while, you just won’t be able to get the loans and credit cards that you once found easy to acquire. And it gets to the point where you may need to take a long hard look in the mirror and think about what your excessive spending is really doing to you.
The Debt Spiral
The fact of the matter is that when we get into the habit of spending money we haven’t budgeted for, we end up using credit cards to help bail us out of that short-term jam. However, after a while, you end up borrowing more money to fill the gap of overspending. And as a result, most of your income goes on repaying the debt, and as you are accustomed to a certain lifestyle, you continue to borrow until you are unable to borrow any more. Then the creditors are asking for the money back, which you are unable to repay! This can have a devastating effect on your home, relationships, and your mental health.
Taking The First Steps
The fact is that you may need to borrow a large sum of money at some point in the future, whether it’s for a down payment on a house or a car, so it’s vital that you learn how to fix bad credit and learn how to get your credit score back up to speed. An emergency always can pop up if we’re not financially ready, so it’s important for you to at least look reliable in the eyes of the banks in case something arises. But before this happens, you need to learn how to stay within your means. People think about how they can maintain their lifestyle while on a measly salary, but the question you will need to ask yourself is, what is the best lifestyle I can have on my current salary? You need to let your finances dictate your lifestyle, rather than the other way round.
Assessing Yourself And Working Out Your Priorities
You need to sit down and take a scalpel to your yearly budget. It’s best to look at bank statements and decide what is essential and what isn’t. Once you have really figured out what is important you need to start thinking about prioritizing your lifestyle, for example, are those DVDs worth buying every month? By looking at the big things you spend your money on, you could come to the realization that a lot of these things aren’t essential in your life.
Making It Part Of Your Lifestyle
This is the biggest shock to the system when it comes to cutting back on spending, but it’s important to remember that you can learn how to do these things, they just need to become a habit. A habit can be formed within a matter of weeks, and while it’s hard at the start, positive habits can form.
We can learn to stop spending, but it’s only feasible when we understand the real impact of our overspending, which is the shock that will set us on the right path to having a lifestyle within our means.