Are you trying to pay off debt? Or want to save money for a significant event? If the answer is yes, overspending will be a barrier to your success.
Time for a confession: I am an over-spender. If there is something I want – and typically this comes in the form of big-ticket items – I purchase it with an “I’ll deal with it later” attitude. As you can imagine, this has gotten me into trouble in the past, particularly with credit card debt.
And while I still have that impulse within me, I’ve learned to suppress it before reaching for my card. If you’re interested in finding out how to stop spending so much money on things that you need, and more often, don’t need, then it’s time to adopt these ten simple strategies that will help you learn how to stop overspending.
1. Know what triggers your spending
Your overspending can be caused by a myriad of different triggers, based on your psychological or emotional states, or even just your routine. Finding out what makes you spend impulsively can save you from your next splurge purchase.
- Environments: Malls, fairs, and other dense shopping experiences are designed to get you to spend money – and then more money. These atmospheres can create a frenzy where you feel like you have to buy something before someone else does.
- Moods: When you’re upset, a little retail therapy can make you feel temporarily better until you have to deal with related bills. Instead of using spending to lift your mood, try activities like exercise or just taking a walk which will help improve your mood – and body.
- Friends: Are you trying to keep up with friends who spend more than you can? You run the risk of losing both your money and your friendships if you feel pressured to overspend.
2. Track all of your expenses
When you’re trying to get your spending under control, you have to first know what your spending looks like on paper. You probably track larger expenses and purchases made on credit or debit cards, but do you have a system to account for all of the things you spend cash on? From buying a pack of gum to filling a parking meter, it’s crucial that you start tracking these small amounts as well as the big ones to keep your spending on budget.
3. Use an app to help you stay on budget
What helped me learn how to stop overspending was using a mobile app to keep my budget on track around the clock. With Trim, I was able to have quick access to all my account balances, which I could look at when the urge struck to spend more than I should. Plus, I was able to find out about monthly subscriptions (I didn’t realize I was still paying for most), and canceling those freed up some money to add to my savings.
4. Go cash-only
In my case, every splurge purchase went straight on my credit card, making it easier to not think about it – until my card bill came, that is. When I stopped carrying my credit card around, I stopped being able to make these purchases, which in turn helped me feel like I had control over my spending. When you restrict your spending to just cash, you are setting yourself a budget every time you leave the house; you can’t spend more than you have on hand. Give yourself a set cash spending amount for the week, and put it all in an envelope. Take what you need with you and when you run out, you can refill from this stash. Drop off receipts or make notes of what the money was used for so you can keep accurate records.
5. Delete credit card information from websites
As I’ve mentioned, my credit card was my weakness, but leaving it at home wouldn’t protect me from another weakness – online shopping. First I literally had to hide my credit card, so I couldn’t quickly complete online checkout, and then I had to go through and delete that information saved by any websites. Saved payment information takes even less of an effort to think about, making it far easier to spend more than you wanted to.
6. Give yourself an online shopping budget
But wait, you say, how can I shop online when I need to if I don’t have my credit card handy? These days, you can protect your personal information and your wallet by using an electronic alternative like PayPal or Payoneer. You can set a limit for your spending on these sites so you can still get your online deals without worrying about mounting debt.
7. Focus on your savings
Saving money now is essentially paying your future self. When it comes time for education costs or retirement or even a new home, that money will be more valuable than ever for keeping your costs down. Try and come up with ways to think about saving as fun, so you get as much joy out of it as you would buying yourself something new.
8. Don’t believe the hype
That new bakery around the corner just released a specialty donut, and people are lining up around the block for it. Of course, it’s fancy so it’s also an $8 donut, far more than what you should be spending. But so many other people are talking about it and waiting for it that it must be out of this world – right? Research has shown that the longer people wait in line, and the more of a barrier to a product, the more people will overspend so they feel as though they have a better return on the investment of their time. If you want to learn how to stop spending so much money, skip the overpriced fads and your wallet will thank you.
9. Take reviews with a grain of salt
A similar process occurs with online reviews. When you look at a product with thousands of reviews, your brain can convince you that it is a higher quality product than something with only a handful of reviews. However, it turns out that the opposite is statistically true, where products with fewer reviews often are of a higher quality and have more thoughtful and in-depth reviews.
10. Think out your vacations
When you plan a vacation, your chief concerns will be flights, accommodation, and maybe a rental car if you need it. But how do you budget for on-the-ground expenses? If you’re headed somewhere with a different currency, you can easily fall into the trap of losing money, both because of exchange rates and because many countries have higher value coins than the US. You probably don’t think much about expenses that only require change when home, but abroad, you could be spending dollars at a time with just a single coin.
If you’re serious about changing your spending patterns, you have to commit. When you learn how to stop spending so much money, you’re better prepared for your future, and you won’t miss out on enjoying life.