When And How To Do A Spending Freeze
Sometimes, the best way to gain control over your finances is to institute a spending freeze. That may sound drastic, but it can work even if you just maintain it for a few days. A spending freeze is where you stop all spending until you can either get some more money in or organize your finances so that you are operating on a budget.
It typically means to stop spending discretionary income on things like entertainment and clothes, but it can also mean that you stop spending all money for a few days or even a couple of weeks. If this sounds like it could help you and you are wondering how you should institute a spending freeze, check out this guide to help get you started.
Why Institute A Spending Freeze?
Starting a spending freeze can be tough, but it can also be a way for you to regain control over your finances and get back on budget. There are several valid reasons why someone would just stop spending money at all. Some of these reasons to start a spending freeze include the following:
- You are waiting for the next paycheck and know your money won't last if you keep spending.
- Some bills haven't gone through your bank yet and you want to make sure they go through.
- Your checking account is overdrawn and you need to get a handle on it.
- You are worried about an upcoming large expense and want to make sure it's covered.
- Someone in your family is overspending and you need to stop it.
- An unexpected expense pops up.
How Do You Do A Spending Freeze?
Implementing a spending freeze is much easier if you don’t have children or another person to take care of, but it can be done in a family, too. The first thing to do is explain to your family why you are doing it and how this spending freeze will ultimately benefit them in the long run.
Explain to them what it means in clear terms and what things are about to change in the way the family currently spends the money. Let them know you need their support in doing this and set a clear date for the spending freeze to start and end. Once you do all of that, you can start with these other things.
1. Put A Hold On Debit And Credit Cards
When it comes to your debit and credit cards, the easiest thing to do is put all of them on hold through your credit card providers. This is a free service by most financial institutions and prevents anyone in the family from using them without talking to your first. This is the first step to your spending freeze.
2. Use Cash
The next step to your spending freeze includes using cash more often. Draw out enough cash for mandated things like gas and food and use only what you take out. It's also good if you have a small notebook to write down every cash expense, so you can be accountable to your family or yourself for what is spent.
3. Contact Companies
If you go on a complete freeze, you will likely need to make some arrangements for things like utilities or other bills that may become due since you won't be paying them for a week or two. Most are happy to work with you on catching up. The secret is to contact them before you get behind. Be sure to have a solid plan in mind for catching up once your spending freeze is over.
4. Use The Time To Learn And Teach
A spending freeze can be a learning experience for the whole family. Use the time to teach your kids about properly budgeting, planning for expenses, and not buying on impulse. Get your spouse and children involved in ways to cut costs after the freeze is over like coupon collecting or shopping on great deals. This is a good way to teach children math and comparison, too.
5. Prepare For The Unexpected
One of the reasons many people initiate a spending freeze is to build up money so that they can pay for an unexpected expense like a home or car repair. While that is a good way to deal with it, other options may get you the money you need quicker. One option is coming to Mississippi Title Loans, Inc. for either title loans, payday loans, or signature installment loans.
When it comes to how much you could get for either three loans, you could get $300 to $2,500 in a title loan, $100 to $400 in a payday loan, and up to $1,250 in a signature installment loan. Plus, you can get through the process for our loans in 30 minutes. To learn more, just read the loan info on our website. Once ready, you can fill out the online form to get a call from the nearest Mississippi loan location.
Fix Your Finances And Try A Spending Freeze Today
If you find yourself needing to fix your financial situation, a spending freeze could be just the thing to help you out. Get started now with these tips and you could be on your way to a better financial status. And if you need help handling your emergency expenses while you are trying to stop your spending, fill out the online form for our Mississippi loans now.
Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.