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How to stop spending more than you earn

If you’re finding that your outgoings are exceeding your incomings on a regular basis, it’s likely a sign that something needs to change.

Acting now can help you make improvements to your finances quickly. Here are some steps which may help you cut back on your spending.

1. Understand your triggers

Look back at your transactions over the last few months and see if there are any areas where you’re repeatedly spending more than you’d like. What is the reason for this? It could be anything, including:

  • pressure (going out for dinner with friends)

  • environment (spending time at shopping centres)

  • mood (browsing online when bored)

Identifying trends may help reshape the way you do things. For example, you don’t want to stop spending time with friends, but you may be able to suggest a cheaper spot for dinner or a different activity that’s free.

Explore more: Understanding your spending

2. Delay your spending

One way to help reduce the chance of buying something you’ll later regret is to delay your decisions for a few days. This may lessen the impact of any spending triggers, or temporary thoughts and may help you become more mindful of your spending. 

Delaying your spending can give you time to think about whether something is necessary or worthwhile. For example, if you’re interested in a new pair of trainers when you’re at the shops, you could feel they’re less necessary a few days later when you’re sitting at home.

Explore more: How to make good spending decisions

3. Limit your borrowing

It can be easy to use a credit card, or overdraft, to make ends meet. However, you may be charged interest, so it can be a good idea to avoid borrowing or minimise how much you borrow.

If you can, try and get by for the month using only the money in your current account. If that’s not possible, look at how much you’re spending on your credit card or using your overdraft and set yourself a goal to reduce that amount each month.

Explore more: How to get out of your overdraft

4. Plan a budget

budget is a good way to stay on top of your spending. You can set yourself specific categories for spending and then a goal within each category. It’s important to be realistic with your goals so you set yourself up for success.

If you need help putting your budget together, you may want to use a budget planner. This can show you a breakdown of where you’re spending, and possibly overspending, your money.  

Once you’ve created your budget, it’s useful to review your transactions and see if there’s anything you’re paying for which you can reduce the cost of, or cancel.

Explore more: How to manage your subscription services and save money

If you’re an HSBC customer with mobile banking, you may be able to use our Balance After Bills tool. This can show you what money you’ll have available once your regular standing orders and Direct Debits have left your account. This could help make it easier to manage your money for the rest of the month. 

Explore more: How to manage bills

5. Track your spending

Once you have your budget make sure you keep a close eye on your spending. Use an app, like the HSBC UK Mobile Banking app, to regularly check your finances to try and avoid any surprises.

If things don’t go exactly to plan that’s okay, but the more you know the more informed decisions you’ll be able to make.

Explore more: Steps to financial wellbeing

What next?

If these strategies aren’t working and you feel things are getting more difficult it’s important to get assistance. There is support available to help you get back on track.

If you think your mental health could be affecting the way you manage your money, we have a range of services available to support you.