Each of us is going to experience months where we overspend, even by significant amounts. As with so many other issues pertaining to budgeting, it is all about how you react. The stuff of life happens, and often it can be expensive. Even if you have been incredibly frugal you only have so much control in life, and you can’t let overspending break you. If you need to recover and here is how to do it.
Let The Pendulum Swing
In life we often go through pendulum swings, and not just in our finances. We want to get into shape so we workout religiously, too much so. We hit the gym 5 times a week, eat nothing but vegetables, and become obsessed with fitness. Eventually we reach our fitness goal and rather than pull back and work out 3 times a week, we quit and regain the weight. We often struggle to live in balance and stay there, and we assume some of you do as well. It seems that this pertains to most people and their finances; we don’t know how to live right in the middle, it is feast or famine. If you have had a super expensive month, you can bet that most of the next month should be committed to going without extra spending. Try to do everything you can on the cheap.
Purposefully allow the pendulum to swing from extreme spending to extreme saving. We know this seems like poor advice, but the shock to your spending system can be one of the best things you do. Most of us don’t feel pain or remorse when we overspend, because spending money usually means enjoyment. Often our overspending has to do with excessive purchases and guess what, that feels good! Who doesn’t enjoy a new gaming console, or a great vacation? We have to feel the pain of not spending money. Let the pendulum swing after you have broken your budget, go monk style on your money for a brief period of time, a couple of weeks to one month.
Make It Land In The Middle
After that month instead of reacting and going back into excessive spending, force your finances into the middle. Hit that sweet spot between spending and saving. What does that look like? Each person’s situation is unique but we would recommend getting to the place where you are saving at least 15% of your money, and more would be better. You want to get into a flow with your finances, where saving and spending live in sync with one another. When you first begin getting serious about personal finance you may have grandiose aspirations. We’ve seen people set goals to save 85% of their income, forever. They often overreact when they aren’t able to hit that ridiculous level. If you hit that 15% level take a breath, you are doing very well. Take our advice and slowly ramp up your savings rather than try to make a radical adjustment. We’ve even got an excellent 1% savings technique that can help you work up to that 15% mark. Slow and steady progress leads to sustainable change.
This is our advice on how to recover when you overspend, what do you think? What is the best way to get back on track after you take your spending too far?