Month: July 2022

How to kick unhealthy habits: Overspending

There are a lot of things that you need on a daily basis to feed your family, get to work and stay healthy. Paying for all of your essentials has probably become more expensive as gas, food and electricity prices continue to rise. So, it’s a really important time to look at your budget and try to cut costs where you can. 

Overspending is a really hard habit to kick. We all have things that we want to buy – things that aren’t essential but bring us joy or help us feel good. But, the stress that can come at the end of the month when it’s hard to cover your bills may not be worth the cost. 

With a budget that works for you and for your family, you can make room for the things you need AND the things you want. To get there, you have to look at your spending, make a spending plan and stick to it. Here are a few steps to help you clean up your budget.

Look at what you’re buying. 

Do you know where your money is going each month? If you don’t regularly look at your credit card statements, bank account or keep track of your receipts, it can be hard to tell where you spend your money. For one month, make a point to track everything you spend. At the end of the month, sit down and look at where you spent your money. Sort your purchases into three categories: 

  • Bills – Bills are expenses that come out of your account every month that you have to pay. The money should go toward things that you need. The amount you pay toward a bill can change each month – like your electricity bill. Or they can stay the same – like insurance payments, housing costs, a car note or medical debt. 
  • Needs – Needs are things that you have to have each month but that you go out and purchase on your own. Your largest need expenses will probably be food and gas costs. Other needs could include personal hygiene products, school supplies and pet care products.
  • Wants – Wants are the things that you enjoy in life, but that aren’t necessary purchases. Things like getting fast food, doing activities with your family and technology could fall into this category. One important note about wants is that they can sometimes look like bills. For example, TV streaming subscription service payments have a monthly cost that you pay online or through the mail like you would a bill. But, it is not an essential part of your budget.

Create a budget.

Now that you can see what you spend in a month, create a budget. Start by figuring out how much money you bring in each month after you pay taxes. Label that total as your income. Then, start subtracting the cost of your bills. For bills like electricity that change each month, it’s best to budget the highest amount you spend (usually in the hottest and coldest months) so you know you have enough money to cover the bill. After you’ve allotted the money for your bills, look at how much income you have left. That income should be used to pay for your needs. If you don’t have enough income left to cover the cost of your needs, check out the next step to see how you can create more room in your budget.

Make small changes to reduce the cost of your needs. 

While you can’t easily change how much you pay in rent or insurance, you can make changes to reduce how much you spend on some of your bills and needs. In hot months, try to run fans and keep window coverings closed during the day so your AC doesn’t run as much. You can also use outdoor cooking methods or opt for small appliances – like grilling or using the stovetop – instead of cooking in your oven to keep the inside temperature of your home cooler. In the winter, dress warmly and use blankets to try and reduce the amount of time you have to run your heat. You can open window coverings to let natural light in – this will provide some warmth from the sun while reducing the amount of time you need to have your lights turned on. Never use your oven or stove to heat your house. 

There are also things that you can do to spend less on needs like gas and groceries. Local grocery stores like Kroger and Aldi have monthly coupons that help you save a lot of money. Planning meals ahead of time based on what meats and produce are on sale can really help you save money at the store. The cost of packaged snacks can also add up quickly. Try to stick to produce (canned or fresh), meat (frozen or fresh) and low-sugar dairy products. Moving away from packaged drinks and using a water filter pitcher at home can also create major savings.

Another way to save money is to make small changes to the way you buy paper products and toiletries. You can save a ton of money each month and help the environment by using dish towels and cloth napkins instead of paper towels. The same is true if you switch from paper plates, bowls, utensils and cups to reusable plastic or ceramic dinnerware. You can purchase dinnerware sets very affordably from local dollar stores or big box stores like Walmart.

When it comes to products you need like toilet paper, soap, toothpaste and feminie hygiene products, it can sometimes be more cost-effective to purchase bigger packages. Next time you’re at the store, look at the cost per unit or CPU on the product price tag. You’ll find that buying a 18-pack of toilet paper has a lower CPU than a four-pack of the same brand and type. The same is probably true for a four-pack of toothpaste vs. a single tube. If it’s something you know that you’ll use and that you have to have, you save money by buying the larger quantity at one time.

Budget a small portion for “happy” purchases. 

One of the reasons that many people fail at budgeting is because they don’t feel like they get to buy anything they want. So, it is important to include fun money in your budget. Once you’ve tested your budget and used strategies to reduce the cost of your bills and needs, start adding fun things to the mix! A strategy that helps some people is to set aside money each week for fun purchases. Even if you designate $1-5 a week, that adds up throughout the month and can create a fund for you to buy things that you want – like a meal out or a new piece of clothing. 

Budgeting can be hard, and if you’re someone who tends to overspend, it can be disheartening to sit down and look at where your money is going. But when you make healthy budgeting choices and reduce your spending, you might find that you’re less stressed and able to handle unforeseen expenses that come your way. 

If you are stressed about money and making ends meet, the team at the Wellness and Stress Clinic is here to help. You can visit our clinic on Monday nights. Start by making an appointment today.