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Spending more than you earn is one of the financial traumas so many people have encountered, nobody wants to be in debt but in as much as we do not want to live in debt we need to watch out on how we spend our money. Living a debt free life might seem quite difficult because of the present day economy and the high cost of living, this makes people to spend money without considering how much they have earned, to spend more you have to equally earn more if not you will be in debt.
I have my own personal experience which I have learnt from it. As a student I never really considered planning my finances, I thought it wasn’t needful to spend wisely, since my parent were the ones giving me money for my expenses so I did not know how important it was to spend wisely but when I started earning money myself I discovered I was spending rashly, buying everything that comes my way, buying everything that looked beautiful even though I would never use them, I lavished money on expensive clothes and accessories.
I kept spending and suddenly I find myself wanting , I could not do the necessary things and most times I would even have to lend money from my friends to pay some bills in school with the mind-set that I would pay off the debt later, but later never came and the debt kept accumulating more and more . As the semester progressed I was already drowning in debt, I barely had enough money to meet up my luxurious lifestyle let alone paying off debt, this habit of overspending gradually led to a cycle of debt that was difficult to break.
HOW I OVERCAME THE HABIT OF OVER SPENDING
In school I had this friend that was so careful in spending money, I used to think she is a miser and a stingy person not until I realized why she used to act that way. My new habit of overspending was digging so deep and gradually became a lifestyle, I knew it was a bad habit that I needed to stop right away, I summon courage to ask my friend how she spends her money.
she told me that she do make budget on how she will spend her income even before she starts spending it, she encouraged me to try same, to me that was weird but I decided to give it a try if it will work out. Getting to the hostel, I started making plans on how I would spend my next money. When the money came I still repeated the same thing I used to do , at this point I understood I t was easier said than done. I tried it some other time but with marked out plans on how to sail through.
1.KEEP RECORD: I bought a journal, I wrote down my monthly income and my daily expenditure, this helped me to track my expenses and to know where my money was going.
2. MAKE A BUDGET: I allocated money for everything I needed including miscellaneous for unforeseen event that requires money. I call my miscellaneous emergency funds.
3.KNOW YOUR NEEDS AND WANTS: off course our needs should be prioritized much more than our wants. I specified the important things I needed and allocated money for them.
4.CUT UNNECESSARY EXPENSES: to curtail spending I had to cut the cost of some things, I discovered I don’t need so many things to survive. I avoided impulse buying, I only bought things that I knew were of essence to me.
All these seemed hard to me from the start but I had to intentionally kill the bad habit of over spending. I disciplined myself to abide by my set financial goals and it actually worked out. I was able to pay off my debt and still had some money left to meet my needs. I was glad I finally learnt how to plan my finances. These are the ways I overcame my financial pitfalls and I believe if you could also learn from this you would be able to avoid debt at all cost.