6 signs you’re overspending, plus 4 tips to get back in control

How do you know if you’re overspending?

Look out for the signs:

1. You save less than 5 percent of your income

2. Your credit card balances aren’t going down

3. Your credit score is below 600

4. You have no emergency fund

5. You’ve never made a budget

6. You’ve paid an overdraft fee

Even if you’re pretty good with your money, separating your spending can help you in two ways — boosting your savings and/or refocusing your spending in a way that’s more aligned with your values.

Set up two separate checking accounts — one checking account for all the bills and living expenses and one checking account for all the fun and bs expenses.

• Fund each account with how much you need.

• Separate your spending — only pay for bills and living expenses out of the bills and life account, and only use the fun account for the nonessentials in your life.

This system only works if you make sure that you adopt this rule as a part of the operating process.

Once a week, give your bills and life account some attention to make sure that things look normal.

For example, if you have a $1000 buffer, check in to make sure that you haven’t dipped below that buffer. And if you have, you can investigate further. You’ll also need to look at your fun account balance before you actually go out or spend money on non-essential purchases.

Looking at your account balances is the bare minimum of getting your finances in order. In the health and fitness world, it’s the equivalent of not sitting on your couch all day.

An ideal buffer is an entire month’s worth of expenses, but less can work too. You could slowly build up your buffer by adding a little bit more to your bills and life account until you have a month’s worth of expenses on hand.

If you don’t have enough of a buffer, you might need to spend some time figuring out a schedule for paying your bills. Usually, you can call and have those due dates changed. Yes, you have to sit down and make phone calls and it’s annoying, but the effort is worth the confidence you’ll feel that your system is set up to work properly.

If you’re going out for a night of fun, leave your responsible bills and life debit card at home. Do not tempt yourself with it. When you’ve had a few libations and you’re feeling full of emotion and want to buy drinks for everyone at the bar, it’s best not to have that temptation present.

Remember: The quality of your financial decisions can be drastically improved by avoiding an environment where you will be tempted to make bad decisions.

The hedonic treadmill is a concept that says humans will keep relatively stable levels of happiness despite positive or negative events.

There isn’t anything inherently wrong with growth and improvement or with setting goals, achieving them and then setting higher ones. But the constant drive for more can be damaging when you are not conscious of your motivation or of the fact that you’re even on the hedonic treadmill.

1. Step off the hedonic treadmill temporarily by choosing not to buy nonessentials for a period of time. Try 30 days, or if you’re feeling wacky, a few months or a whole year.
2. Create a list of all the things you want to buy. Feel free to go full nerd on it: Do research, make notes, make it a handsome list. Any time you want to buy something put it on that list. Then, make a rule for how long a thing needs to be on the list before you buy it — it could be 24 hours or a few months. Your mind will then get trained for delayed gratification.

This method of managing your finances doesn’t require technical skills. It’s not like dunking a basketball or dribbling one. It only takes your time and effort to get it up and running and then some more time and effort to maintain it. There is no reason to think you can’t do either of those things.

it’s silly to fail at things that don’t require skill and only require effort.

• Effort is something you can control; you could even make it a habit.
• Skill takes a lifetime of practice, patience and time — multiplied by effort.