We’ve all had that moment where we take a look at our bank account and take a step back in complete shock and think “where did it all go?”. Even if we have the best intentions to be better and save money, it can be so hard to stop spending money that we don’t need. If this is you, I’m glad you’re looking for tips to stop overspending because it can completely change your finances.
7 Tips to STOP Overspending
#1: Understand Your Reasons
When most people think about shopping, they don’t think about the emotions that are connected to spending money. A lot of the time we don’t realize that there are psychological reasons for overspending.
Personally, I find myself buying things that I don’t really need when I’m stressed/anxious. I feel like buying something new will help me deal with the stress because it will give me a short high that I’ll really enjoy. This is a really common trigger for people who are chronic overspenders. What are some other possible reasons for overspending?
We’ve all been there, sitting at work or in class on a computer, completely unable to focus. What do we do? Well, first we check Facebook. What do we do next? Online shop of course!
Boredom can be a serious budget killer and can really contribute to us overspending. You can be sitting on the couch watching tv, scrolling through Amazon on your phone and not even realize that you just bought $100 worth of things you didn’t need and you’ll forget about them until they’re delivered.
Confusion of Wants vs Needs
Some days we really feel like we need that new pair of running shoes because if we don’t have them we won’t work out. Except there’s a two-month-old pair of running shoes in the closet that is perfectly fine. We seriously need to focus on true wants and needs. We need food, water, clothing (but not in excess) and a roof over our heads. The rest is just noise and clutter. Being able to differentiate between our wants and our needs can really help to kick that overspending habit.
I’ve been known to buy myself a new outfit anytime I met a goal or after I’d finish a school semester. I convinced myself that I deserved that new $100 outfit because I survived something. Using shopping as a reward can lead you down a spiral that will seriously never end. Eventually, you’ll end up buying yourself something just because you got out of bed.
I’ve seen countless stories of people who grew up poor who can’t control themselves once they start making real money. This is especially true when people become parents. You’ll start spending so much money on your children just because you don’t want them to miss out on things like you did, even though you can’t afford it. Trying to make up for your parent’s lack of money isn’t going to get you anywhere but in a pile of debt.
Keeping up with the Joneses
Trying to live a life like the Joneses is one of the worst things you can do for your finances. Trying to keep up with the Joneses causes you to live way above your means because you’re afraid that your life is missing something just because someone else has it. You need to focus on not trying to be something that you’re not or someone who you can’t afford to be.
#2: Cut Your Cards
There have been a ton of studies done that show people don’t have a real connection between their own money and credit cards. When you swipe or tap a credit card, it doesn’t have the same intense feelings associated with it like when you hand over a couple $20 bills. This is why I always suggest that overspenders or people in debt stop using credit.
Credit cards can be great to earn points or just for convenience, but they can really mess up your finances if you’re using them to buy things you just simply can’t afford. If you start using just cash to make all your purchases you’ll find yourself using less money all the time.
- Related: 10 Daily Habits of Frugal People
#3: Start a Budget
Budgeting is the best thing you can possibly do for every part of your finances. I get that starting a budget is the worst. It’s stressful to get it going but I promise you it’s worth it. Having a budget isn’t going to stop you from being able to do fun things, it’s going to help you to plan for the fun things you want while still meeting your other goals. A budget is just a plan for every dollar and you can still plan for fun purchases once in a while.
If it isn’t in your budget, you aren’t allowed to buy it. Point blank. No questions asked. If you want to start a budget but don’t know where to start, I recommend the zero-based budgeting method because it’s great for beginners!
#4: Set Financial Goals
The best way to motivate yourself to stop spending so much money is to have small, short-term financial goals that you’re working towards. It doesn’t really matter what the goal is, as long as it’s short-term and focused. You could be saving for a trip, trying to pay off debt, or building up an emergency fund. If every day you think about what your small goal is, you’ll think twice about going to the mall or shopping on Amazon. What do you want to accomplish this year? Can you use any of those as a way to avoid overspending?
#5: Track Your Spending
If you’re really caught scratching your head at the end of the month wondering where your money goes, start tracking. If you track every penny you spend for 90 days, you’ll see how much money you just threw away at things that were entirely avoidable. When you want to lose weight people always suggest you track what you eat, and this is the same concept. Keep all your receipts and make a spreadsheet of all the money you spend and you’ll really see where you can improve.
#6: Stick to your List
Never leave your house without a list, not just at the grocery store. If you’re going to the mall and only need some new underwear, stick to your list. Don’t just let yourself to wander and buy things that you don’t need.
Use an app on your phone like Google Keep as a grocery list so you have it on your phone at all times. It can cut out so many purchases you didn’t need to make because you can’t stray from the list!
#7: Stay Home
I get it, we live in a time where FOMO is real. We see our friends on Instagram and Facebook having what seems like a great time, wearing awesome clothes, and spending all sorts of money and we want to be able to do it too. I totally understand that feeling because I feel like that every day. However, I choose to focus on my goals and say no to a lot of social events and it’s really hard. I know what I want, and I want to travel the world in 2 years. I’m focusing on building my income and paying off my debt. No time to party.
Staying home can help you stop spending money that you don’t have. You don’t need to go out drinking with your friends every weekend or get your nails done all the time. Focus on your goals.
I know that kicking a habit like overspending can be hard and can be super emotional. You may find yourself struggling but just stick with it. Try a no-spend month or a shopping ban. There are so many great things you can do, and stopping the overspending habit can really change your entire life. If you need help or just a little motivation, please don’t hesitate to contact me! I’m here for you.