In my previous post on How To Live A Rich Life With Your Current Income, I touched on how you can spend your money on your passion or hobby. To summarize, it’s all about allocating a certain percentage of your money toward what you enjoy, allowing for guilt-free spending. You may read more on that post to gain a deeper understanding. How does that post relate to what I am about to share with you in this post?

For you to live a “rich” life, there will be times when you may face the temptation to overspend. Your inner self may tell you that it’s just a one-off occurrence, along with many other excuses to justify overspending. It happens often, and it has happened to me as well, where I’ve had the temptation to spend extra, and I often regret those decisions when I do. Personally, when I overspend, I need to reduce my other expenses to make up for the overspent amount. I’m sure many of you face the same issue.

You need to know how much budget you have each month for your spending. Allocate your budget properly and avoid spending beyond your allotted amount.

You should be aware of what you can afford and what you cannot. If you’re earning RM5,000 a month and plan to buy a car with monthly repayments of RM1,500 or more, you probably can’t afford it if your other expenses are high. It’s all about allocating your budget wisely.

This is the most crucial step when considering a purchase, even for small expenses. Whenever I plan to buy something, I ask myself, “Do I really need it? Is it necessary?” There are often internal debates within myself before I make a purchase. Sometimes, I may spend time standing and staring at the item while having this inner conversation. If I can’t decide, I might walk away and return later to buy the item once I’ve made up my mind. More often than not, when I walk away, I never return to make the purchase. Simply thinking once, twice, and thrice about how much you need an item will reduce impulse spending.

Recording your expenses is the best habit you can develop for yourself. I’ve been recording my expenses for almost 10 years using the same financial apps. Not only does it help me track my spending, but it also allows me to analyze my spending habits and easily refer to my past expenses when needed.

We all have moments of impulse buying or overspending. Regardless of whether the expenses are large or small, you need to know when to stop. This is especially important for smaller expenses on platforms like Shopee, Lazada, or Taobao. We often buy items as cheap as RM10, but if we buy 30 of them, it adds up to RM300. The best guideline is to refer back to your spending budget or the limits you’ve set for yourself each month.