Overspending is one of the most sinister ways to ruin your life because it’s so easy. It’s not just going into your overdraft, either. Credit cards and repayment plans make it easy to borrow small sums here and there to treat yourself if and when you need. Those repayments, however, add up.
If you went from thinking it was a great idea to spread out the cost of things to now realizing the cumulative cost of all those repayments has put you into serious debt, then use this guide to both handle those debts and stop your overspending habits outright.
1. Enter into an IVA to Manage Your Debt
IVA debt relief is very simple. It would help if you worked with an insolvency practitioner who will then go to your creditors to negotiate a new payment plan that you can afford. These practitioners supervise you during the process to ensure you make your payments each and every time. The insolvency practitioner will need to get at least 75% of the creditors to be in favor of this plan, however, so it’s best to start before they start chasing up payments.
2. Reduce Your Fixed Costs
There are many ways that you can reduce your fixed costs. Some options, like your rent or mortgage repayments, will be more fixed than others. In the same breath, you may be surprised at your options for everything else. You can reduce your utilities by adopting some energy-saving measures and switching providers, for example. When it comes to taxes, always go online to see if any support schemes are in place to help you.
3. Take Out the Impulse from Shopping
When you buy anything from here on out, put a buffer between when you see the item and when you buy it. You can do this in two ways. The first is to create a list of what you need. Research that need, compare products or services and then calculate that cost into your budget. To stop impulse shopping further, put an embargo on purchases. Instead of seeing something and buying it, see it, save it, and then wait. At a minimum, you should wait for at least 24 hours (though longer is ideal). To save further, just put a price drop alert on it and forget about it. If it’s still on your mind after that cooldown time, you can then reconsider.
4. Increase Your Purchase Standards
When you buy anything, be far more critical of its production of it. With clothes, look at the seams, how the pattern matches up, the thickness of the material, and so on. This requires you to learn more about how things are made, which in turn will help you buy better and also understand what’s a good deal and what isn’t.
5. Do Things Yourself
DIY is a great way to save, be more mindful about what you buy, and also a great way to enrich yourself without having to go out and spend money. Materials can be cheap or second-hand to help you save on these new hobbies. In terms of food, doing more meals from scratch can be just the ticket to get more value out of your purchases and make them last longer, so there’s minimal waste.