Tips to stop overspending

Get control of your finances

The American family is financially stretched. This may not come as a surprise to many, but let’s break it down.

According to an article in The Atlantic, the top five expenses for American households are housing, transportation, food, insurance and health care. These categories consume 81 percent of household income, with 53 percent of that for housing and transportation.

That leaves little for debt repayment, clothing, entertainment and savings. What is a family to do? Fortunately, there are steps to reduce household spending and reach your goals:

• Complete a full financial assessment: Make a list of your true expenses. These are the monthly bills, groceries and gas, but don’t forget about surprise expenses that are a matter of “when” they happen, not “if.” These may include car repairs, medical bills, vacations, holidays/ birthdays, etc. If you’re married, complete this exercise with your spouse.

• Make a plan to balance things: Once you’ve listed your true expenses, you may find that your expenses exceed your take-home income. There are two things you can do: increase income and/or decrease expenses.

It may mean a second job for a time, or doing without cable temporarily, but in the long run, the short-term sacrifices will make a difference.

• Identify your priorities: If debt is getting in the way of your ability to save for your future, plan to tackle that debt. Ironically, in order to successfully pay off debt, you need a bit of savings to make sure you don’t have to put a car repair, medical bill or holiday on that credit card! Aim for $1,000 to $2,000 in savings, then start putting all extra toward the debt.

Shannon Doyle, CFC®, is a Certified Financial Counselor at LSS Financial Counseling, who works with Everence to provide budget and debt counseling.

Our free guide can help

Everence offers a free guide, Creating a cash flow plan, which can help you align your money decisions with your true needs. Download your own copy at everence.com/getting-started.

The guide includes a worksheet to help you keep tabs on your expenses and income.

Everence members also have access to six free, confidential and expert help sessions through LSS Financial Counseling. Call its certified financial counselors at (877) 809-0039 or visit lssmn.org/ everence for help with debt or budget counseling. You can also visit its blog for financial tips at blog.conqueryourdebt.org.