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.

Things can improve faster if you act quickly. Here are some steps to rein in your spending.

Understand your triggers

Look back over your transactions for the last few months and see whether 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 to dinner with friends)
  • environment (spending time at shopping centres)
  • mood (browsing online when bored on the way home from work)

If you can identify any trends it can help you 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

Delay your spending

One way to help reduce the chance of buying something that 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.

For example, if you’re interested in a new pair of trainers when you’re at the shops you may find that you feel they’re less necessary a few days later when you’re sitting at home.

Explore more: How to make good spending decisions

Limit your borrowing

It can be easy to use a credit card or overdraft to make ends meet between pay checks. However, given that you may be charged interest it’s ideal to avoid or minimise how much you’re borrowing. 

If you can, set yourself a goal of getting by for the month with the money in your current account. If that’s not possible, look at how much you’re spending on the credit card or with the overdraft and set yourself a goal of reducing that by a percentage each month.

Create a budget

A budget is a good way to control 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.

Explore more: How to create a budget

Track your spending closely

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 check where you’re at and ensure there are no 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.

What next?

If these strategies aren’t working and you feel things are getting more difficult it’s important to get assistance.

Explore more: What to do if you fall behind on repayments

Explore more: Where can you go for assistance?