As a low income earner, you might think money just slept through your fingers because you do not have enough.
A lot of this behavior with money plays a major role in your spending habits as a low income earner.
A firm decision on exactly what you are going to spend your money on is a great way to stop spending mindlessly.
In this post, we will be discussing how to control your spending habits as a low income earner.
Let’s dive in,
Laying out an entire plan of how you are going to allocate your spending contributes a lot to spending your money well. Aim to spend your money on what you truly love and value.
40-50% of the things we spend our money on is out of habits. Our spending patterns now is identical to how we spend our money in the past.
How to stop spending money on things you do not need as a low income earner?
Take a critical look at how you are spending your money as a low income earner. Your spending habits will not change overnight if you do not access it.
When you want to spend money, think about the long term value you will get from what you want to buy. Most of the time, we spend consciously out of habits and not out of need.
Things you can do to control your spending habits as a low income earner
- Check how you are currently spending money: Pull out your bank statement and start tracking your spending habits.
- Take note of the way you swipe your cards for purchases that are outside your normal bills.
- Conduct a thorough check and highlight transactions that occurs frequently. Make a deliberate attempt to cut down these type transactions.
- Check reasons why you value majority of your unnecessary spending and adopt paying for it out of your pocket.
- Figure out how to eradicate expenses on things that are not valuable to you.
Reasons why you cannot control your spending habits as a low income earner
With the rise of so many advertising channels, temptation to spend a lot without control is on the increase. A recent survey found out 1/3 of people between the ages of 30-49 on a low income have more credit debt than savings.
Some of these reasons are listed below;
- Tagged money: People spend money without looking at the benefit they stand to gain if invested wisely. Some already categories it into frivolous spending without thinking about ways to maximize it with delayed gratification.
- Failure to incorporate exceptional and occasional purchase into our budget can encourage overspending.
- Failure to make a decision on the best ways to spend your money as a low income earner.
- Prioritizing immediate reward on spending now, by discrediting long term interest and placing weight on short term interest.
- Ease of credit card spending: Because it is much easier to use your credit card for purchases, when overspending, you might not easily notice.
5 ways to control your spending habits as a low income earner
1. Be clear about your goals: It is not enough to randomly know you want to save money or pay off debt. Get clear on your main decision, be specific and take some minutes out of your time every day to think about your money goals.
2. Choose what is important with your finance: Do not under estimate the important of being financially free. Define your reasons of being financially free as a low income earner and start working towards it.
3. Invest in your financial journey and do it regularly: You can do these by planning your finances, learn how to budget, learn savings strategies by watching and reading personal finance contents that will help curb your overspending habits.
4. Become organized and get familiar with your money: Understand why you are spending your money. The more organized you are with your money, the easier it gets for you not to overspend.
5. Take action: Always show up for your finances whenever it is draining. Check areas in your life that triggers overspending, cut them off and start saving more.
In conclusion, conduct a thorough assessment on where you are with your spending habits as a low income earner. Acknowledge what can be changed and activate a plan of action to get you to where you want with your money.
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