How to Stop Spending more than you Earn

It may sound crazy to spend more money than you bring in, but how is that even possible? Well, it is definitely possible and happens to good people quite often. The holidays are a good example of people spending money they don’t technically have available. If you are one those unfortunate people that seem to always spend more than you bring in, don’t feel bad because you are in good company. Read on to learn some tricks for staying within your income.


First thing is first: sit down and create a budget. This is a list of all of your monthly expenditures and income. You add up all of your basic bills  such as rent, mortgage, utilities, food, insurance, etc., and subtract that amount from your monthly income. What you have left is your spending money or savings. By making a budget, you can see where you are over spending and by how much. Then you begin figuring out where to cut back and start doing it. 

Track spending

Since most people only balance their budgets at bill time, keeping a separate record of expenditures is useful the rest of the month. This record can also make maintaining an accurate budget easier. It is an added bonus that having to keep track of every penny will help keep you honest, so to speak. You can literally see where every dollar is going throughout the week/month. It can help you decide which purchases you can cut down on or get rid of altogether.

Stop/avoid using credit accounts

The single biggest mistake people can make is opening any kind of credit account. Buying items and services on credit is that fastest way to run up a bill that you simply cannot pay off in full. It is so easy to view a credit account as a great way to get the things you want at the time, but then the bill arrives. If you avoid opening or stop using credit accounts, then you eliminate temptation to spend money you do not have.

Limit unnecessary purchases

If you often buy a new computer or replace another one every six months or so, then stop it. You are wasting your money, and that money probably has a better place to go. The need to have the latest and greatest everything can really get people into financial trouble for little advantage. The computer you bought today will work just fine a year from now if you maintain it properly. The same can be said about leasing a new vehicle every two years. Honestly, why throw money out the window like that? Buy a good reliable car, take care of it and pocket all that money you used to shell out each month on lease payments! You might also save a bundle on auto insurance by buying a slightly older vehicle; that means more money in your pocket. 


This does not necessarily mean you have to open a savings account with your bank, although it might be handier than hiding money under the mattress! Cash is sometimes easier to spend when it is within reach. Periodically save a certain amount such as $10 for something special you want. The reason to save for this special item is that it will mean more to you once you are finally able to afford it. Plus, saving and getting the special item will help you feel like your hard work is worth something.

It is not as difficult as it seems to begin living within your means. Stop using credit accounts and start living by this golden rule: If you do not have the cash, then you do not need it. Limit extravagant purchases to every now and then when you have managed to save up for them. It takes time to alter the way you are used to handling your money, but once you do the rewards are instant.