Do you struggle to control your spending around your friends and family? If the urge to \u2018keep up\u2019 with a certain lifestyle is stretching your finances, it could be time to take action.<\/p>\n\n\n\n
From splitting the bill at an expensive restaurant, to having the \u2018right\u2019 house, car and clothes, many of us fall victim to overspending. But if you regularly suffer from buyer\u2019s remorse, or spend over and above your means, it\u2019s time for a serious reality check.<\/p>\n\n\n\n
Overspending can quickly spiral into long-term debt, especially if you use credit cards to try and bridge the gap.<\/p>\n\n\n\n
Young Australians are particularly at risk, taking on debt at a far earlier age and carrying it longer than ever before. Research by RateCity shows that 42 per cent of those aged under 24 have between $10,000 and $30,000 in personal debt, not including a mortgage.<\/p>\n\n\n\n
Even if you\u2019re not living paycheck to paycheck, overspending will prevent you from reaching your longer term financial goals, like financial security and financial freedom. <\/p>\n\n\n\n
Fortunately spending habits are just that \u2013 habits \u2013 and they can be changed. Here\u2019s how to avoid the debt spiral and get your finances on track.<\/p>\n\n\n\n
1. Identify your risky behaviours<\/strong><\/p>\n\n\n\n Do a financial health check and work out where the majority of your overspending happens.<\/p>\n\n\n\n Is it a penchant for designer clothes? An addiction to expensive electronics? Or a love of fine dining? We all have vices that threaten to throw us off track, so look at the numbers and be honest with yourself about which behaviours are forcing your finances off course.<\/p>\n\n\n\n If those behaviours are closely associated with certain friends, family or work colleagues, it could be time to re-evaluate your unhealthy relationships.<\/p>\n\n\n\n 2. Associate with people who share your values<\/strong><\/p>\n\n\n\n Once you know what\u2019s driving your poor spending habits, use it to take action. Distance yourself from any negative influences and find others who better fit in with your long term plans. Being surrounded by likeminded people will help restore your bank balance in no time.<\/p>\n\n\n\n 3. Find alternatives<\/strong><\/p>\n\n\n\n If your social life is at the centre of your overspending it could be time to make some healthy swaps. Try suggesting low-cost alternatives such as bush walking, art classes or the beach. You might even meet new people who share your values.<\/p>\n\n\n\n Lead by example and encourage good financial practices among your friends and family. Be upfront about your goals and values, without being pushy. True friends will be supportive and want to spend time with you anyway.<\/p>\n\n\n\n 4. Make a financial plan<\/strong><\/p>\n\n\n\n Taking control of your spending starts with evaluating your priorities and setting long-term goals. By making a financial plan, you\u2019ll identify what is really important to you \u2013 and the steps you need to take to get there.<\/p>\n\n\n\n You can do much of the groundwork on your own, although consulting a financial planning professional can help you to nail the details and act on your plans. You could be experiencing financial freedom sooner than you realise.<\/p>\n\n\n\n 5. Stick to a budget<\/strong><\/p>\n\n\n\n It\u2019s much easier to maintain your new spending habits and make a real change if you have a budget in place. Make sure to allocate funds for clothing, entertainment and \u2018fun\u2019, so that you still get to indulge in some of your favourite interests.<\/p>\n\n\n\n 6. Create a \u2018want to buy\u2019 list<\/strong><\/p>\n\n\n\n Every time something comes up that you want to buy, add it to your list then wait at least seven days before purchasing the item. In the meantime, find at least three prices for the same item. This reduces the risk of splurging on things you don\u2019t really need and makes it more likely that you\u2019ll get a good deal.<\/p>\n\n\n\n 7. Focus on the bigger picture<\/strong><\/p>\n\n\n\n It\u2019s easy to get carried away trying to keep up with a certain lifestyle and you may not even realise it\u2019s happening until you\u2019re already in debt. Good financial planning and a focus on the bigger picture will help keep your overspending in check.<\/p>\n\n\n\n Source: Money & Life<\/p>\n","protected":false},"excerpt":{"rendered":" Do you struggle to control your spending around your friends and family? If the urge to \u2018keep up\u2019 with a certain lifestyle is stretching your finances, it could be time to take action. 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