Are you spending too much? Do you think that it’s time you need to learn how to stop spending money?
There is a straightforward test that will give you a clear answer. Are you spending more than you are earning? If you’re not, you may be safe – for now. But if your outgoings are more than your incomings, you are on the road to financial ruin, and you need to stop spending, immediately.
One of the biggest culprits when it comes to overspending is the credit card. It may, at times, feel like your best friend, but use it too frequently, and it could easily turn out to be your worst enemy.
The thin end of the wedge
The problem with credit cards is that they seemingly allow people to buy things at a fraction of the price. Of course, that is not really true because if you only ever pay the minimum repayment when you receive your monthly bill, you will have to carry on paying the balance you owe month after month and pay interest on it too.
In the meantime, you can carry on making more purchases via the card. They, of course, increase the size of the overall debt and if you carry on only paying the minimum repayment each month, that debt will relentlessly grow larger. It is the thin end of the wedge.
The further you eat into that wedge, the thicker it becomes, and this is where the danger lies; especially if you are getting towards spending more than you’re earning. If you carry on in the same way, you may eventually have to pay out more money than you have coming in, and that will spell disaster.
Treat your credit card like a cash card
The best way to use a credit card is to treat it like a cash card. In other words, when the bill comes in you pay it off in full. If you go down this route, you’re using your card to ease your cash flow.
Like many (in fact the majority of) South Africans, you could find yourself in a situation where you spend your monthly earnings within five or six days of receiving them. According to Businesstech over 56% of middle income South African earners fall into this bracket.
Make a conscious decision to stop spending
If you do find that your spending has gotten out of control and you’ve crossed that earning versus spending threshold, you must stop spending straight away. Yes, that is easier than it might sound at first, but there will probably be many areas when you can limit your expenditure. Take a look at this list of helpful tips on how to stop spending, and you’ll see what we mean.
Deciding to stop spending on non-essential items is a big step to take. But once you have taken it, you will be on the way to controlling your finances. If you stick to your guns, you should find your debt steadily decreasing, and who knows? You may one day find yourself in a place where you have sufficient earnings left over at the end of the month to start a saving habit.
To read more on topics like this, check out the life tips category.
