If you find yourself surrounded by purchases you never or rarely use, you may be an overspender.
In this episode of In The Know’s Getting Rich, financial expert Carmen Perez shares her tips on how to cut back on shopping. Almost half of Americans spend all of their income each year, which means they aren’t saving. Meanwhile, 21% spend more money than they earn, according to Perez.
“Whether it’s treating yourself, managing your stress, keeping up with the crowd, boredom or any number of psychological reasons. We act on the impulse to overspend,” Perez says.
It’s important to get a handle on overspending before it gets you into trouble — and here’s how to do it.
The 50-30-20 budget is a great way to ensure you’re saving, paying bills and still have enough for all those fun extras you want but don’t really need.
“It’s 50% of your income goes to rent utilities food and transportation, 30% is flexible spending — that’s where your fun money comes in — and then 20% would be going to your financial goals,” she explains.
Cancel catalogs and emails
Get rid of all that marketing that may tempt you to the dark side.
“Great deal on a new blender? It isn’t if you don’t need one,” Perez says. “All these emails are screaming at you to buy things that you don’t need. Quitting them is easy as hitting the unsubscribe button.”
No spend challenge
Try a challenge that curbs your spending habits. Like a pantry challenge where you actually have to eat all the food you already have before buying more.
“Start small without going 30 days without buying a certain type of thing. Whether that be eating out, clothes shopping, beauty products …” she says.
Limit access to shopping
Avoid environments that trigger your impulse to spend — and that includes online shopping environments.
“Just think about how much money you’d save if you didn’t go on Amazon or visit Target in a month,” Perez says.
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