A danger sign of a debt problem is borrowing money before payday...
Is your spending super-sized or super-skinny?
When it comes to spending, some people fall into one of two camps.
A super-size spender will spend too much too fast and often shell out cash like a three-armed man on payday.
Super-skinny spenders make sure all bills are paid on time, but they’re too frugal in other areas and often have zero social life or entertainment budgets (even the official receiver in bankruptcy allows some money in monthly budget for entertainment!).
In this article we’ll help you identify what sort of spending type you are and how to budget better for it.
Find your spending personality
Whatever your personality and whatever your spending habits the most important place to start is to put an accurate personal budget together. Putting a budget together isn’t rocket science but it’s important that you’re realistic.
Don’t jot down what you think you spend; you’re only cheating yourself. You should note what you actually spend. You could keep a spending diary for a couple of months, an easy way to find out what your real spending habits are.
Once you know where your cash goes you can start looking at making savings or look where you can spend a little more to enjoy a better quality of life.
Signs that your spending is super-sized
You’ll know pretty quickly if your super-sized spending isn’t working. You’ll be running out of money for essentials before the end of the month.
- You might be forced to use overdrafts, borrow money from family and friends or even use high interest payday loans
- You might also bounce or cancel direct debits or fall behind on utility bills or other essential priority payments. All these signs combined could mean you slide into debt problems (especially if you’ve got credit debts)
Signs that your spending is super-skinny
From another point of view, your budget isn’t working if your overall quality of life suffers. This is especially true for super-skinny spenders.
- If you don’t owe anybody anything, all your bills are paid but you’re sitting in the dark eating cold beans from a tin you might want to consider spending a little more cash to make sure you’re getting a little more out of life!
- Having a social life and some relaxation doesn’t have to cost the earth; there’s nothing wrong with the odd meal out or trip to the cinema. You need things like this in your budget to help give you a balance.
- Even if you have debt problems your creditors don’t expect you to live life like a monk until they’re repaid. It’s healthy to set money aside to treat yourself from time to time.
Breaking bad budgets
Spending personalities come in all shapes and sizes and we all have different priorities when it comes to where our cash is spent. However, a bad budget is a habit that you can break with a bit of effort.
If you spend half the month worrying about how you’re going to afford essential purchases you’ll know this sort of stress first hand. Having a realistic and well thought out budget can cut this stress dramatically.
The first step to breaking the habit is to get your budget under the magnifying glass and look for the areas that need attention. Our online debt advice tool Debt Remedy can help you put together a budget. If you’ve got a debt problem it’ll tell you the best solution to your situation.