Most of us have been in a situation where we have spent more than we planned for. It could be that holiday when we wanted to treat every member of the family or that shopping spree when you spent more than you should have. Situations like these are bound to happen, but they ought to be lessons, and we can work our way out and recover. If continued, they may lead to an unfortunate situation where we get into debt and ruin our financial health.
Here are four steps to help you recover from overspending.
Assess the damage
Before you embark on the recovery process, assess the damage, this involves ascertaining how much was spent. How much did you overspend on your budget? Also I think about what might be affected by this overspending. Check all your documents, credit and debit card, make sure you are not missing anything.
Get back to your budget
You’ll need to go back to your spending plan, and if you don’t have one, you should come up with a budget. Write down all your expenses starting with the fixed ones such as rent and food. Compare them with your income. If you are spending more than you can afford based on your income, then you need to make some adjustments.
Come up with a plan to pay your debts
You may have over spent through borrowing or have used money which was meant for saving or other important expenses. You have to come up with a plan on how you are going to clear this. One way of doing this is setting some amount every month towards this. If you can settle once, the better solution is to, go for it and clear everything as fast as you can and avoid interest rates. To manage this, you have to set aside an amount which will go towards clearing your debts. If this is not possible, cut on spending and channel the money towards repayments of the overspent accounts.
Figure out where you went wrong
Do not repeat your mistakes, you have to learn a lesson and avoid a similar scenario in the future. You have to figure out what went wrong so that in the future the same is not repeated. It is called taking the bull by its horns; don’t be afraid to explore the situation, however ugly it was, now it will only get better. You’ll learn a vital lesson and avoid it in the future. While at it, look at the brighter side of your life, you’ll have learnt a lesson and in future this will be avoided.
Disclaimer: The above information is general in nature and not intended to be financial advice. You should consider seeking professional advice before following any suggestions in this blog/website.