These 3 Practical Hacks Can Stop Overspending and Help You Reach Your Financial Goals

Have you ever felt like your money vanishes into thin air and you are always lagging on your financial goals? You are not alone. In a recent TikTok video, Rebecca Sowden (@rebecca.sowden)  who used to struggle with overspending, shares three clever strategies she uses to manage her finances. These tips can help anyone regardless of past spending habits, control their money.

The video starts with Rebecca acknowledging her past struggles with overspending and the need to find ways to "protect her money from herself." She then dives into her three key strategies.

Double-duty emergency funds: Rebecca suggests having two separate emergency funds. The first, a "safety net account" is for smaller emergencies like a broken pair of glasses or a flat tire. This account holds a smaller amount, typically between $1,000 and $1,500, and is easily accessible. Think of it as a buffer for those unexpected but manageable hiccups.

The second emergency fund is the real heavy hitter. This account holds 6 to 12 months' worth of living expenses and is kept in a separate bank from her everyday accounts. The idea here is "out of sight, out of mind." This ensures this larger sum is only used for emergencies like a job loss or major medical expense.

Credit cards: Rebecca suggests using debit cards for everyday purchases while reserving credit cards for predictable expenses like bills or pre-planned large purchases. Here's the key: She pays off the credit card balance immediately. This way, she gets the benefits of credit card rewards programs without falling into the trap of accumulating debt.

Rewarding yourself for good habits: Here's a creative twist on budgeting. Rebecca uses a "fund spending account" that she fills by rewarding herself for good financial behavior. For example, she might add money to this account to complete "no-spend days" or reach a gym attendance goal. This system helps her maintain positive financial habits while allowing for some fun spending.

The video resonated with viewers, with many commenting on how practical and motivational these strategies are. "I use my credit cards for all spending and then pay them off every paycheck. You get Cashback rewards and better fraud protection than a debit card," shared one user. 

"For me: automatic transfers! As soon as my salary comes in, it transfers my money into their savings, so what I have left is what I can spend," said another user which seems like a good and practical way of saving money.

As young adults continue to grow their income, it's equally important to understand how and where to save that money, and for what purposes, and to also identify ways of investing money so it can grow. A stable financial situation takes time to achieve. No matter how tiny your improvement may seem, acknowledge it and have patience with yourself. 

You can follow Rebecca Sowden (@rebecca.sowden) on TikTok for more such financial advice and tips.