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How to Control Overspending and “Gotcha” Moments

control overspending

Awww…did you forget about a bill this month?

The number one reason you should be saving money right now is for emergencies. Guaranteed they are going to happen. The second reason we need to save money consistently is for making purchases or for paying bills. As I’ve written about, this concept goes completely against the grain of what is normal in American society. Even though your friends won’t be doing this, there are two completely legitimate reasons why you should develop a monthly saving pattern.

First of all, saving for purchases can help control overspending because it forces us to wait. We tend to get into trouble with our spending habits because we believe in gratifying ourselves instantly. We see something…we like it…we buy it, on the spot. We don’t think how that purchase sets us back financially because it makes us feel so good.

Following a monthly savings plan has another benefit in that it helps eliminate the monthly budget busters that I call “gotcha moments.” What’s a “gotcha moment?”

A “gotcha moment” happens when you are sailing calmly through your monthly budget. You are right on track to hit all your spending targets for that month and then “out of nowhere” you are hit with a life event or a bill that you had forgotten to compensate for. These are different than emergencies because they are items that should have been on your radar but you just missed. Some examples of “gotcha moments” might be:

You forgot this month your yearly term life insurance bill is due.

The kids are going back to school in a couple of weeks and have no supplies.

The dog needs a vet visit so you can put him Doggy Day Care while you go on vacation.

You didn’t realize Christmas happens in December again this year.

Birthday parties, the trash bill, AAA membership fees, tax bills…the “gotcha moment” list goes on and on.

Excel SpreadsheetAs I mentioned in my last post, we could not control overspending and were overwhelmed with these “gotcha moments.” We didn’t prepare for purchases and were not forward thinking enough when it came to bills and life events. That’s when we had a revelation of an Excel spreadsheet.

We decided to list all the non-monthly bills, when that particular bill was due and how much it would be. We then divided the spreadsheet up into 12 columns and set aside money each month so we could pay for that bill when it was time. We automated our checking account to transfer the necessary amount of money to our savings account at the end of each month.  Then, when the bill arrived months later, we had the money already saved to pay for it.

This also worked really well for keeping track of our emergency fund, saving for our family events like a vacation or saving for bigger purchases. We just listed whatever we wanted to save for in one column and kept track of how much we put into that category every month.

Here is a sample based on how we set ours up:

Sample Savings Spreadsheet

As you can see in the spreadsheet example, this family would set aside $748.85 at the beginning or end of each month (whichever you prefer) to cover their future expenditures. Then when the bill comes due, the money is there to pay for it. No more frustration…no more killing the monthly budget because of a surprise…no more going into debt to pay for something.

The best part is that it’s pretty easy to figure this out. It takes some time to compile all the bill data and set up your document but it isn’t rocket science. Anyone can do this.

But as I began this post by saying, most people aren’t doing this. If you are tired of overspending and the “gotcha moments” this can help. Are you ready to be weird?

Questions: Is it difficult for you to control overspending? What’s your favorite “gotcha moment?” Do you have something similar set up to save for bills and purchases? 

Next Post: How Far Would You Go To Get What You Want?

Prior Post: The Un-American Way: Saving For Purchases

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Comments

  1. “The number one reason you should be saving money right now is for emergencies.” The financial advisor in me wants to skywrite this over … well, everywhere! It always surprises me how few people have an emergency fund. We’re planning a big family vacation and my husband and I have been talking about nonstop to the girls. They can’t wait. Well, my daughter misplaced her retainer and was so worried that we wouldn’t be able to afford the trip since we had to replace it. I was so happy to sit down and share with her that we have an emergency fund for the little things we didn’t expect to happen, but if they did – they wouldn’t derail our goals. I’m glad you and your wife figured this out and your spreadsheet looks great.

    • That’s awesome! And what a great lesson your daughter is learning through all of this. Accidents happen but they don’t have to alter your life if you have prepared for them.

  2. That’s a great spreadsheet. Thanks for sharing it!

  3. My saving plan is very simple, I save everything over a certain dollar amount out of every weekly check I get. That and I make paying myself the first priority before I spend another dollar. I found this to be the easiest way to get the most money saved.

    • Paying yourself first is a huge priority. Most wait until the end of the month to see what is “left over” to save. The answer usually is “not much.”

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