You have two options: make more money or spend less money. We really wish there was another way around it, but there’s not. First, we want you to know that you’re not alone: the average U.S. citizen spends $1.33 for every $1 they earn. This may not seem like a huge discrepancy, but adjust this number to the average salary of a college-educated adult and all of a sudden we’re spending almost $60,000 for every $45,000 salary. This overspending adds up.
But you can quickly overcome this trend by sitting down and creating a budget for yourself – less than 50% of U.S. citizens have a personal budget, and less than 29% have a budget AND follow it the majority of the time. If you skimmed over our section on Building a Budget, go back and read it. Right now. The information in that section, and the structured budget you will create from it, will be absolutely invaluable.
Tips to Eliminate Impulse Spending
We also understand that overspending is often a symptom of something greater, and that following these tips may not provide enough of the push you need to change your spending habits. Please reach out to a financial therapist if you think you have issues with impulse control, are using “retail therapy” as a form of self-medication, or feel you may turn to shoplifting if you are unable to purchase the luxuries you are used to. You can find several resources for compulsive spending online or through your local mental health professional.
Sometimes the core issue isn’t that you’re spending frivolously, but that you’re trying to live off less than a living wage in your area. While – yes – you are technically still spending more than you can afford, it is not because of impulse spending or an extravagant lifestyle.
The obvious answer is to find a higher-paying job, but this is easier said than done. This should be your long-term goal, but in the meantime you have a few options:
More Hours or a Second Job
It might not be glamorous, but food service and retail businesses are almost always looking for extra hourly employees. This can be a short-term fix while you work on lowering your monthly living expenses or finding higher-paying work.
Lower Your Monthly Living Expenses
Again, it’s not glamorous, but if you look critically at your budget you’ll probably find some excess spending. Here are some commonly suggested areas to cut costs:
Because while they may pad your wallet with a little extra beer money, they won’t save you from long-term debt. Our goal is to prepare you for responsible spending and investing for the rest of your life – focusing on short-term fixes will just put a band-aid over the real problems affecting your finances.
Let us help you create a budget designed for your individualized resources so that you can get your spending under control, pay off your existing debt, and start planning for the future. You can break the cycle of overspending and credit card debt, but it will take some work evaluating your current habits and understanding that solutions won’t appear overnight. But don’t stress, we’re here to help you along the way.