Are you being honest about what can you afford to spend?

When it comes to personal finances, many of us have faced the reality of living beyond our means, even if unintentionally.

We aim for the lifestyle we desire, but do we truly know if we can afford it based on our salary?

Being honest about your spending habits is the first step to building a financially secure future.

Why it can be hard to be honest with yourself

It’s easy to justify a new purchase or a lifestyle upgrade:

• “I deserve this!”
• “It’s only for now; I’ll save more next month.”
• “Everyone else has it, so why shouldn’t I?”

These thoughts aren’t inherently bad, but without clear boundaries, they can lead to financial strain. A lack of visibility into your actual income and expenses can make it even harder to know when you’re overspending.

Signs of overspending

Its coming up to Christmas and its easy to fall into the trap that everyone overspends at Christmas.

The simple fact is that they don’t!

But understanding the signs of overspending is vital if you want to take control of your money. Here are a few signs your spending is out of control.

• Relying on Credit: Regularly using credit cards for essentials or not paying off your full balance.
• No Savings: Struggling to save for emergencies, retirement, or other goals.
• Stress About Money: Constant anxiety or arguments about finances.
• Living for payday! Barely making it to your next salary payment.

Steps to assess your spending

1. Track Your Expenses Use a budgeting app like Snoop, Money Hub or Emma.
2. Create a Budget

Follow the 50/30/20 rule:

50% of your income for needs (rent, bills, food)

30% for wants (entertainment, dining out)

20% for savings or debt repayment

3. Analyse Wants vs. Needs Are there areas where you can cut back? Do you really need that subscription or luxury purchase?

4. Set Spending Limits Give yourself an allowance for discretionary spending, and stick to it.

5. Review Regularly Set a monthly “money date” to assess your finances and adjust your budget as needed.

Useful Websites:

MoneySavingExpert -Tips and tools for saving and budgeting.

MoneyHelper – A UK-based resource for financial guidance.

Step Change - A UK charity helping people deal with debt

Be honest about your spending

Being honest with yourself about what you can afford isn’t about restriction, it’s about empowerment. Understanding your finances allows you to make informed decisions, reduce stress, and work toward the life you want.

Remember, financial well-being is a journey, not a destination.

Start today by taking one small step toward clarity and control over your spending.