#015 – Overspending is a common struggle in many households.
On this episode, Mayra teaches strategies to stay on track with your goals and stick to the amounts you set in your budget for each category. Food is one of the hardest to get control over.
[0:00] Do you tend to overspend when you’re at the grocery store or eating out? If you do, you don’t want to miss this episode, where I’m going to talk about strategies you can use to curve that going forward.
[0:34] Hola, hola. Thank you so much for being here. You are in the right place. On today’s show, I want to talk about when we created our first budget, back in 2010, and we realized that this was for real. I remember walking into the Arizona Mills, and we went for one thing. It was just to buy shoes for one of our children. And we passed by the Eddie Bauer store, and my husband walks in and says, I love this shirt. And I looked at him and I was like we just did our budget. It was the first time we had ever done a budget, and we didn’t have any budget for clothes, and we really didn’t need anything, he just liked the shirt. And it was a first time that we were able to like, oh, this is when you say no, because it’s not in the plan. And we walked out of that store and it was like the first time we ever said no to our impulses. It was so life-changing. The first time you actually said no to something that was right in front of you, you’ll remember forever, that was ours. So, when I have clients say, how do you say no? Well, you have a plan. So once you have a plan, you take it up a notch by evaluating your budget and seeing where do you tend to overspend? For us, it was clothing, eating out, and groceries. Those were our top three. So what we did was we pulled out cash for these categories. We didn’t spend anything unless we had it in cash. And we did this for a long time, maybe 5 years. We just went back to the cash system a few months ago, where we pull out the cash every single week for two categories, so for our groceries and our eating out. And what we did is we took it a step further and we tend to combine the two. Because if we eat out more then we have less groceries, and if we have tons of groceries, we tend to eat out less. So it kind of just goes back and forth.
[3:06] Now, if you’re just starting out, you should set a goal of what do you want to spend on groceries. If you find yourself spending more on groceries, then you need to reevaluate whether the number you set on the budget is realistic, and that’s what it was for us. When we first started budgeting in 2010, our grocery budget was $150 a week. That is no longer realistic today. Now, if I make an effort and go shop at a different grocery store not super close to me, I might be able to stay within $150 a week, but with a grown man… My son is almost 20. He eats a ton, and anybody with teenage boys can attest to the fact that these boys can eat. And I also have a 16-year-old daughter, and these teenagers, my goodness. So we had to adjust it. Now, we also had a… we would also eat out a lot back in 2010. Now, that was also about 100-150 a week, depending on the week. And now, we pull out 350 a week, and that could be for either other two categories. Remember, personal finances is personal, you can do whatever you want, but if you want to stop overspending and you want to control some of the categories that you tend to overspend on, this is the best way to do it. Now, you also tend to spend less when you have cash than when you have plastic, whether it’s debit or credit. The reason for that is that money when it leaves you, you have this ouchy moment. You actually feel money. When you can visually see $100 leaving you, you’re just like, dang, that’s a lot! When you swipe for $100? It doesn’t phase you. This is why I recommend my clients to use cash for as many categories as they can. But if they don’t want to use this cash system for most of their categories, I do recommend, at the very least, you try this for the top three categories you tend to overspend in. For the first few weeks, I would recommend that you try cash only. Then as you move and control some of your spending, you can automate some of these payments, and you can swipe for gas, you can swipe for all these things that you’re just going to have to spend. You really can’t control gasoline, unless you’re out there driving around with no purpose. Then, gas should be an automatic. Now, if you are trying to control your gas and you are trying to be mindful, then try the cash.
[6:11] You don’t have an ouchy moment when you swipe the card. So try to not use debit or credit. Now let’s talk about credit for just a second. I am not a fan of credit. I know there’s tons of people that say you can travel hack and you can miss and you can that but, honestly, there’s no need for that. If you have money, you can travel. If you have money, you can do all the things you want to do. And honestly, it’s such a distraction and it’s so time-consuming to do all those things and tricks. They have done their research. They have people that actually focus on research that shows when you get a credit card, they’re gonna win. Most of the time, they are going to win. They might get you in with a 0% interest and this and that, but if you don’t have the discipline to pay off your credit card every single month, to avoid the interest… or if, God forbid, you have an emergency and you can’t make the entire payment, they win. You have to pay interest on it. So, don’t play that game, Like it’s just not worth it. I personally don’t care for it. It’s just not important to me. Everybody, again, personal finance is personal.
[7:39] I’m going to share what I do. I’m going to share what has worked for me. And I want to go over some excuses I get when I say let’s get rid of the credit cards. Some people say, I lack self control, like I can’t use cash. Well, you’re an adult, right? You have goals, you want to retire, you want to have money in the future? Then, don’t use a credit card. Try using cash. You might say, oh, it’s gonna be really hard to book travel if I don’t have a credit card. You can book travel with a debit card. So, if you run it like a visa, you’re good. I’ve rented cars with a debit card and was not easy. They wanted a $200 deposit, but I had $200 so it’s fine. Not a big deal. I might hear, oh, cash is so bulky, I just don’t want to carry such a big wallet. Really? No, I’m serious, people have told me that, and I’m like, really? Loose change is another one I hear. You’ll probably have under a dollar in your pocket if you’re really good at giving change. I mean for a guy, I get it, but for a girl, you usually have a coin purse. Are you willing to try this cash? Let me know. Send me a DM on Instagram.
[9:11] Thanks for listening to Debt Free Latina. Make sure you hit that subscribe button so you can take Mayra with you on your journey to become debt free as you build financial wealth. Looking for more? Follow Mayra on Instagram @debtfree.latina, on Facebook @debtfreelatina, and online at debtfreelatina.com.