Regain control of your finances after new year overspending
What's the story
Did you get tempted by lucrative New Year discounts and offers and ended up going overboard with your spending? Don't worry, you are not alone. Your instant gratification was at play. With the money gone, it's no use crying over spilled milk. However, the good part is that you can still regain control of your personal finance. Read on to learn how.
Sources
Find out where you overspent
Your first step should be to assess your transactions and find out where you have gone over and above your capacity. Assess all your payments done in cash, UPI, and debit or credit cards. Note them down in a spreadsheet. It will help you track what products or services you bought that were not that necessary and could have been avoided.
Freeze spending
Tighten your pockets
Once you have assessed your overspending, the next step is to put a stop to it. This could mean cutting on your restaurant dinners, online shopping on e-commerce platforms, or habitual clubbing or partying. Remember, you can still take control of your spending. Just take things one day at a time. Make only responsible purchases and avoid causing more problems than required.
Debt pay-off
Get rid of credit card debt
The next important step is to get rid of your debts. If you overspend using your credit card, thinking you will repay with your monthly income the next month, it is unhealthy financial behavior. With lucrative discount offers on credit cards, people often indulge in overspending and regret it later. Try to repay the outstanding amount within the interest-free period to avoid interest charges.
Budget
Make a budget
If you don't have a budget, now is the time to create one. Transfer whatever is left over into a separate account and utilize the remaining money only for your necessary expenditures. Make both short-term and long-term budgets. A mini-budget serves as a stopgap measure to help you get back on track. A long-term budget helps you plan for your long-term goals.
Rule of thumb
Follow the 'Income - savings = expenditure' rule
When you get your next month's salary, follow the formula of "Income minus savings equals expenditure (Income - savings = expenditure)." Take out the amount that you need to save, not what you can save, into a separate account. Then, consider the amount you are left with as your real income. This psychological hack helps those who lack self-control when it comes to spending.