Each payday, you have great intentions. You swear that this month you aren’t going to spend too much money. You are going to watch your pennies and keep your spending under control. But, before you know it, you can’t even afford to buy groceries. Is there an answer to your problem? Yes. STOP SPENDING MONEY.
Overspending is a problem that affects people from all walks of life. Whether you are rich or struggle to make ends meet, you too might find that you spend too much. Some reasons are financial, and others are emotional.
The first step to getting spending under control is to understand why you are spending too much. After years of helping thousands of readers (just like you), I’ve compiled a list of the top reasons that people overspend and the steps to help you stop. You might find yourself in one, two, or even more!
See: How To Spend Less Money Without Feeling Deprived
HOW DO YOU KNOW IF YOU ARE OVERSPENDING?
YOU’VE MAXED OUT YOUR CREDIT CARDS
When there is no room to charge anything on your cards, you might have a problem. In most cases, maxed credit cards signal you are living beyond your means. If you have to continue to charge because you don’t have money, then you are spending too much.
YOU CAN’T FIND A HOME FOR YOUR LATEST PURCHASE
Your temptation might be electronics or handbags. No matter what you love to buy, you might notice you are running out of room to store things. When stuff takes over your home and causes clutter, it is time to take a long, hard look at how you spend money.
YOUR BUDGET NEVER WORKS
There may be months when you don’t have enough money in your budget to cover your mortgage or food. When you continually spend money on the wrong things, your budget will not work.
This means if you have just $50 for entertainment, do not spend $75. That other $25 has to come from another budget line.
YOU SPEND MORE THAN YOU EARN
Take a look at your credit card balances. You might be paying only the minimum balance because you can’t pay it in full. When you spend more than you make and continue to add more debt, take a look at what you are buying. It might be time to pull back and stay out of the stores.
HOW TO STOP SPENDING SO MUCH MONEY
Now that you can see how you spend your money, the next step is to make a change. You have to stop throwing it away. Right now. Here are the steps you can take to control and stop spending money.
1. MAKE A BUDGET
I know, I know. I probably sound like a broken record as I keep bringing up this budget thing. However, it’s true. If you do not have a budget, you have no idea where you are spending your money.
A budget is needed so that you can direct your money where to go each time you get paid. It also helps you know how much you have available to spend on housing, utilities, groceries, clothing, dining out, and even entertainment. When you understand you have a limited amount to spend on specific categories, you can begin gaining control of your spending.
One effective way to get started is by implementing a weekly budget. Unlike monthly budgets that can sometimes feel overwhelming or distant, a weekly budget allows for more frequent check-ins and adjustments, ensuring you stay on track with your financial goals.
See: How to Create a Budget (even if you suck at budgeting)
2. PLAN AHEAD
Meal planning is one thing many people don’t think about when it comes to overspending. If you don’t plan your meals (and stock your fridge and pantry accordingly), you are more likely to run out to eat for dinner. Doing this at $25 a pop (or more) 2 or 3 times a week quickly takes its toll on your budget.
Creating a meal plan will not only help you control your spending, but you might also find that you eat (and feel) much better too.
3. USE A SHOPPING LIST
Before you go to the store, make a list. Check your fridge, freezer, and pantry so that you are not purchasing items you do not need – especially produce.
There is so much waste of food that expires before you can consume it. This results in you buying items that end up in the trash can instead of on your table. Make sure you plan your shopping trip and then purchase just what you need, as well as what you can eat, before you hit the store the following week.
4. STOP PAYING FOR CONVENIENCE
Convenience is costly. There is a quick fix for nearly everything. You can find dinners in boxes, small pre-packaged snacks, etc. Rather than purchasing convenience items, buy the larger-size snacks and then repackage them into smaller baggies. You will not only get more out of a box, but you can even control how much you put into each baggie.
There are other ways we pay for convenience. We pay for someone to iron our shirts, wash our cars, and even mow our lawns. By doing these things ourselves, we can save much more money and easily stop overspending.
See: How You Are Killing Your Grocery Budget
5. STOP USING CREDIT CARDS
We live in an age where our money is all digitally tracked, be it on credit or debit cards. Yes, these payment methods are more convenient, but they also make it easier to overspend. When you use cash, it is more difficult to overspend.
I hear all the time that some people pay off their credit cards at the end of the month and that they don’t overspend, but this is not the truth for many people. It’s easy to think you’re just spending a little extra on your card – maybe $10 a week. However, that $10 a week is a hit of $520 a year. What could you do with an additional $500 in your pocket?
6. PAY YOUR BILLS ON TIME
We all have bills. We know when they are due, but sometimes we mess up and pay late. When you miss the payment due date, you get assessed a late charge. It’s best to pay them on time so you don’t pay more than you need to.
In addition to late fees, not paying your bills on time can have an adverse effect on your credit score.
Learn my tips on how to organize your bills, so you never pay them late again.
7. DO NOT LIVE ABOVE YOUR MEANS
Most of us would love new clothes or a new car. We all would like to make more money or get the hottest new device. The thing is, can you afford it? Ask yourself – is it a want or is it a need?
If you are using credit or loans to get items that you can’t afford, then you are living beyond your means and spending money you don’t have. Scale back and make sure that you can honestly afford the house or the car and that it doesn’t ruin your budget and cost you too much.
See: Defining Your Wants vs. Your Needs
8. DON’T FALL FOR IMPULSE BUYS
Stores are sneaky about luring us to spend money. They use signs, lay out, and even scents to lure you into wanting to buy more. The thing is, if you purchase something you did not intend to, then you are already blowing your budget and probably overspending.
Another way you are spending too much is when you plan dinner but then decide at the last minute to go out to dinner instead. Why do that when you have food waiting for you at home (which you’ve already paid for)?
If you feel a rush because of that new item, you may make a purchase due to impulse and emotion instead of need. Learning to identify the reason behind the buy can help you avoid impulse buys.
See: Ten Simple Tips to Prevent Overspending
9. FIND ANOTHER BOREDOM FILLER
I remember being in an online forum when my kids were little, and we talked about our day. Many of the mothers went to the store every day. They said they could not handle being in the house and just had to go somewhere. That resulted in them buying things they did not need.
If you are bored, find a new hobby. Consider a Mommy and Me class. Go to the library or for a walk. Play a game with the kids. Find a way to redirect your boredom so you stay out of the store and stop overspending.
10. USE FINANCIAL GOALS
When you do not have financial goals, you have nothing to work towards. Think about the goals you want to set – you might want to get out of debt, or you may want that newer vehicle. Take a look at what you are spending each week on non-essential items. What would happen if you would put that money into savings or pay off your debt instead? How much closer would you be to getting that new car or being debt-free?
Find a goal you want to achieve. Talk to your family and see if you have something you can work towards together. By setting a goal that everyone wants, you will all be more aware of your spending and will contribute towards reaching it more quickly.
11. STOP SPENDING MONEY WHEN YOU TRACK YOUR SHOPPING
I know many people who have tried using cash, and they say it does not work because they spend it too quickly. Others I know spend too much on plastic each month because they do not track their spending.
If you use cash, this is where the envelope system can be most helpful. You will track your spending out of each one so you can see where your money is going. As the amount in the envelope gets smaller and smaller, you’ll think twice before you pick up an impulse purchase — because you may not be able to afford it.
You can do this same thing if you use plastic, provided you are disciplined. There are all sorts of tracking apps to help you monitor what you are spending on all of your various categories. You can even use a small notebook to record purchases or save all receipts.
No matter how you pay for items or what system you use, make sure you track what you spend—you might be shocked to learn where your money goes.
See: Foolproof Ways To Get Your Budget Back On Track
12. DON’T FALL FOR THE SALES
When you walk into the store, pay no mind to the sales if they don’t help you save money on something you already intended to purchase. Use your list and stick to it. Don’t fall for the fancy sales signs, smells, and flashing lights to lure you into buying something you don’t need.
See: Understanding the Tricks Stores Use to Get You to Spend Money
Before you can gain control of your finances, you need to figure out your “why.” Understanding the reason behind you spending more than you should will help you make better choices. This, plus simple tactics in how you spend and track spending, changes the way you view money and can make all the difference in your financial health.
