💸 5 easy tips to avoid overspending

Saturday,
February 4, 2023

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The week in review

• About 20% of the S&P 500 reported earnings this week. Notable names reporting included General Motors (GM), which surprised investors after handedly beating the Street’s top and bottom line estimates.

• The Federal Reserve raised its policy rate by 25 basis points at Wednesday’s FOMC meeting. Fed Chairman Jerome Powell emphasized that additional rate increases would be appropriate and a substantial reduction of the Fed’s balance sheet was forthcoming.

• In economic data, PCE inflation slowed to 4.4%, the lowest annual increase since October 2021. Meanwhile, the latest consumer spending numbers indicated that households cut spending in December.

For more economic news, visit On the Money — SoFi’s one-stop-shop for news, trends, and tips!

Learn 5 easy tips to avoid overspending.

1. Set up a budget that works for you. When creating a budget, it’s important to set aside money for both necessary and unnecessary spending each month. Many financial planners recommend the 50/30/40 rule, which involves breaking your after-tax income into three buckets — needs, wants, and savings.

2. Ask the right questions when shopping sales. There is power in the pause before a purchase. Before buying something on sale — regardless of how good the deal is — ask yourself if you really want and/or need the item, or if it’s the sale itself that could be driving the instinct to purchase.

3. Try a one-month spending freeze. Consider putting yourself on a 30-day nonessential spending freeze. Once you begin to see the payoff of not giving in to impulse buying, you may find yourself spending less — even after the freeze is over.

4. Switch to cash. Consider taking out enough cash at the beginning of the week to cover your daily expenses. The envelope system is one method which involves gathering envelopes for all your variable expenses, and labeling each one according to how much you’ve allocated in your budget.

5. Follow your money. Track your spending each day. This includes every cash, debit, or credit purchase you make, plus every bill you pay for an entire month. Seeing it clearly laid out could help you think twice before buying something nonessential, causing you to be more intentional with every dollar.

Want to build stronger financial habits in 2023? Learn more ways to cut back on spending that don’t require a complete lifestyle overhaul.

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