Hey Shopaholic, Here's How to Stop Overspending Your Money

*Hang on, the stilettos I've been eyeing just went on sale.*

Let's face it, saving up is really, REALLY hard. I mean, how pretty would a pair of Jimmy Choo peep-toe platforms or a Chanel checkered co-ord set look in your closet? Absolutely gorge. But that said, we know that you do realise that the 'future you' is entirely dependent on how responsible the 'current you' is.

Before you experience a major existential crisis (and possibly a li'l guilt)—no, you don't need to make do with the leftover take-out in your fridge—let us offer some relief: It is *totally* possible to save an adequate amount of money, without having to necessarily curb your materialistic desires. To begin with, setting aside a portion of each paycheck is probably the easiest way to stockpile cash for a rainy day. But there's more than that, that you can do.

Hiral Jain, Co-Founder and CFO, Market Pulse Technologies, maps out a few financially suited strategies that can go far in leaving some money in the bank at the end of the month. "While you may kick off the month with the best intentions, if your financial fundamentals aren’t in place, you’re always at risk of draining your savings, splurging without restraint, and of course, running out of funds for what you actually need," she puts forth. 

While the unpleasant consequences of going all-out with your cash need not be spelt out, it is worth diving into a few reminders to keep you from overspending:

 

Plan For Years, Not Days

 

According to Katie Waters, Founder of Stable Waters Financial, "People get overly ambitious at the start of the month, then nibble away at their savings and end with nothing." Agree? Agree. There is no dearth of reasons why setting out a budget and sticking to it is beneficial. "Ensure that you prioritise your expenses—placing the essentials (rent, utilities, loan repayments, etc) at the very top—so that you never fall behind (or fall short) on your payments, and into the vicious cycle of debt," suggests Jain. Once you've budgeted for your top priorities, chalk out your leftover funds strategically while asking yourself some major questions: 

1. What are my long term goals? Do I want to pursue further education abroad? Travel the world? Save up for a house? For any of these, you need a fixed minimum amount to be saved every month. 

2. What is it that I really need, and will it add to my overall quality of life? If yes, it is worth investing in. Pick the online class over the pricey meal—every little bit of prudence goes a long way.

3. What is it that I really want? Our silliest indulgences can be set along with a priority, and more often than not, making the effort to log them as a budget helps us shave off the excess and avoid any unnecessary purchases.

 

Don’t Fall For Attractive EMI Offers

 

When you're looking to purchase a big-ticket item, an EMI scheme that seems easy to pay off may lure you into the apparent 'once-in-a-lifetime deal'. However, often the hidden intent of such schemes is to attract the customer into offers that aren’t strictly transparent about the full terms of the deal. "For instance, most novice customers get misled as they don’t examine the interest rate, but only the EMI. But banks can simply increase the tenure of the loan and decrease the EMI, which ends up being a costlier deal in the long term," reveals Jain. 

 

Hold Yourself Accountable

 

Many of us tend to indulge in extravagances not because we strictly require them, but out of habit or an inability to control ourselves. While the meagre expenses may seem little at the time, they will add up and gnaw at you! "One of the ways to be accountable with your money is to download apps that act as a money diary and add up your expenses in line with your budget. Alternatively, you could go the old fashioned way—bring your trusted circle of people into the fold and seek support for your overspending," recommends Jain.

 

Limit Your Credit Cards

 

According to Grant Donnelly, who researches financial decision making at Harvard Business School, "Anything that creates more friction gives you time to second-guess a purchase." So, deleting your credit card information from the shopping apps on your phone may help. Hiral Jain informs us that the 'buy now and pay later', as a maxim, often leads to mounting expenses which can be dangerous for those with money control issues. "They sound like attractive propositions—especially with the way banks plug them into you—but in reality come with difficult caveats. The interest rates are typically high, and they gradually grow with every unpaid balance (which is often what happens with compulsive spenders). This lowers your overall credit score that can lead to higher premiums on loans, insurances, etc," she adds.

 

Automate Your Payments

 

Overspending is rooted in the illusion of control. Hiral Jain states, "It's important to demystify the entire process. A great way to do that would be to enter into an arrangement with your bank to automate your payments. This way, your first and second financial priorities—living essentials and savings—can be well taken care of. Make sure that the amount required for bills, as well as the money for your fixed deposit, is automatically deducted at a particular date at the beginning of the month. This leaves little room to cheat yourself, and allows you to make the most of your leftover funds." It is important to realise that impulse buying is a source of temporary joy that often comes with real, hurtful long term consequences.