How to stop overspending in 5 steps

Even the best of budgeter overspends on occasion. 

Have you ever taken a look at your bills or bank account only to realize you spent more money than you intended to? If you've found yourself in this position, it's not too late to get back on track.

Here are five steps to recovering from overspending:

1. Stop the bleed

First and foremost, put a freeze on your spending. No more grabbing multiple coffees or drinks after work, eating dinners out, or shopping on Amazon. Put a full stop on all spending until you can get a better idea of what happened.

Just because you overspent doesn't mean you need to give up for the remainder of the month. Take it one day at a time and make the best decisions you can now to prevent more damage than necessary. 

2. Take inventory 

OK, so you spent more than you should have and now it's time to go through all your accounts and determine where you actually overspent. Was it too much at coffee shops? Groceries? Gifts? Random purchases from David Jones? It can be more comfortable to ignore what's going on, but facing your situation head on will help you get a grasp and take steps to move forward. 

3. Create or update your budget

If you don't already have a budget now is the time to make one. The easiest way to do so is to use a free budget planner tool like one available on loansHub or you can do it manually by adding all your fixed bills for the week/ fortnight or monthly and subtracting it from your net income.

What you have left over is to be used for all variable (discretionary) spending such as food, groceries, shopping, etc. You can split the total into amounts for each category. If you already have a budget then make sure everything is updated and accounted for so that you can move onto the next step. 

4. Beg, borrow, and steal (your own money)

Once you have a budget set up you can move money around from one category of spending to another. Let's say you overspent on coffee and dining out, but have underspent on your allotted monthly allowance for shopping and groceries thus far.

You can now shift the amounts you have left over for shopping and groceries to help combat the overspending in the other areas. If money is tight everywhere and you don't have a lot of wiggle room, it may be time to consider taking up a side hustle to cover the difference. 

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5. Prevent future overspending 

A budget is a guide, but no one has it down 100%. The best way to prevent future overspending is to have a plan and check in on your spending on a regular basis. By knowing where your money is going you can make adjustments in real time instead of waiting for the end of the month to realize you overspent. 

Overspending is something that happens on occasion to even the best of budgeters, but by following these steps you should be able to get back on track quickly without having to take on unnecessary debt. 

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This article via forbes does not constitute advice; readers should seek independent and personalised counsel from a trusted adviser that specialises in property, a tax accountant and property design specialist.