Controlling overspending can be a challenging task, but there are several strategies and rules you can follow to help you manage your finances more effectively. Today, MO Foundation would like to share our Top 10 rules you can consider implementing experiment with different strategies and rules to find what works best for you.

1. Save First: We prioritize this rule at the top of our list, because it guarantees a solution to the issue of overspending. As soon as your monthly income is deposited into your bank account, make it a habit to automatically transfer at least 20% to a separate bank account. We have previous articles available on setting up accounts and utilizing automation in transfers. Consider this as “Pay Yourself” fund, intended for emergency funds, savings, or future investments. After allocating this amount, you can confidently spend the remaining without jeopardizing your financial security.
2. 50/30/20 Rule: Allocate 50% of your income for essential expenses like housing, transportation, and groceries; 30% for discretionary spending such as entertainment and dining out; and 20% for saving belongs to the first rule we shared earlier. This rule helps you strike a balance between necessities and indulgences while prioritizing savings.
3. Needs vs. Wants Rule: Before making a purchase, distinguish between your needs and wants. Ask yourself if the item is essential for your well-being or if it’s more of a desire or impulse. Not everyone can discern this, but another perspective on Needs expenses is that they are the ones that demand your attention, even if you may not want to pay for them. These are obligations that must be fulfilled, such as house rental, utilities, mortgage repayments, loans, and commuting expenses. While some individuals may argue that health insurance is unnecessary, we consider it mandatory for the safeguarding of both your health and financial well-being.
4. Delayed Gratification Rule: Practice delayed gratification by postponing purchases and saving up for them instead. Set financial goals and work towards them before rewarding yourself with non-essential purchases. This rule cultivates patience and discipline while reducing impulsive spending.
5. Use Cash or Debit Cards: Leave credit cards at home to avoid accumulating debt. Stick to cash or debit cards, as it forces you to spend within your means and prevents overspending. On a cash side, withdraw a predetermined amount of money each week or month and limit your spending to that amount. This rule makes you more conscious of your spending since you physically see the money leaving your wallet. We have also written the pros and cons of credit card.
6. 30-Day List Rule: Create a list of items you want to purchase but aren’t urgent or necessary. Whenever you come across something you want, add it to the list and commit to waiting for 30 days before buying it. Often, after the waiting period, you’ll realize that you no longer desire or need the item. Once you are at this stage, you know this item belongs to the unnecessary lists.
7. Subscription Audit Rule: Regularly review your subscription services (e.g., streaming platforms, gym memberships, magazine subscriptions) and assess their value. Cancel any subscriptions that you no longer use or find unnecessary. This rule helps eliminate recurring expenses that can accumulate over time.
8. One-In, One-Out Rule: For every new item you bring into your home, commit to getting rid of one item. This rule encourages you to declutter and think twice before making unnecessary purchases. It also helps you maintain a more minimalist lifestyle. Garage sales could be the perfect way to recycle your unwanted goods and recoup some money in the process.
9. Practice Minimalism: Embrace a minimalist lifestyle by decluttering and simplifying your belongings. Avoid unnecessary purchases and focus on experiences and meaningful relationships rather than material possessions.
10. Plan for Special Occasions: Plan and save for special occasions, such as birthdays or holidays, in advance. This prevents last-minute overspending and reduces financial stress during these periods. These special occasions can serve as a tempting opportunity to indulge in excessive spending. However, it is advisable to plan your purchases strategically by taking advantage of big promotions and super sales. By doing so, you can enjoy the best deals available and save a significant amount of money.

Moreover, find an accountability partner, such as a friend or family member, who can assist you in staying committed to your spending goals. Alternatively, you can also exchange methods that have proven effective for each other. Learning from others’ experiences can often be valuable. The crucial aspect is to be aware of your spending habits and make deliberate choices that align with your financial objectives. Remember, habits are formed through thoughts, actions, and repetition. Therefore, adjust your mindset! Begin by contemplating whether spending a dollar will bring you happiness, and consider how saving two dollars could be more advantageous in the long run.