Overspending? Here’s How to Stop!
Do you need to stop overspending? Are you frequently finding yourself without the money you need? Here’s how to take a financial inventory to get your spending under control.
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Are you overspending? Here are 7 things to consider:
The Cambridge Dictionary defines overspending as spending more money than you should. Does that sound like you? There are ways to get a handle on it!
The key to finding out how to stop overspending for me was to figure out what caused me to do it in the first place. I realized I wasn’t aware of how much I was spending, especially when using credit cards to pay for things. I needed to take a financial inventory to understand my spending habits to see where my money was going. And boy, was I surprised!
What are the triggers that cause you to spend too much?
Think about what causes you to overspend. For me, shopping in certain stores was a huge problem. There’s one big box store in particular – when I go there for just a few things, I buy a cart full! It doesn’t seem to matter that I don’t need the items I buy, but one store more than anywhere else tempts me.
Another thing that impacted my spending was my dining-out habits. Breakfast for two out ran anywhere from $20-$25 before, and now I’m finding it’s running $35-$40 on average. We used to be able to go to dinner for $40-$50, and now that’s up to around $70 or more.
One more trigger for me is coffee and I know it. My frequent trips stopping for coffee on my way added up considerably, and why? I can make it at home easily and take it with me.
My worst trigger of all – sales. I find myself getting sucked in because I spot something that I feel is a great deal. Do I need these things? Probably not! But I keep feeling like if I don’t buy them while they’re on sale, I’ll be missing out!
Spend some time thinking about what your spending triggers are. To understand your reasons for spending too much, read 12 Psychological Reasons for Overspending to identify your triggers.
Write them in a list so you know to be aware of them, and do everything possible to avoid them. Find alternative stores, pick different things to do, and even stop looking at sale flyers and items if you know that’s part of the problem like I did.
Are you in financial trouble or close to it?
Look, everybody makes mistakes! The key is to figure out how to fix them. Do you find yourself spending more money than you should regularly? Here are 10 Warning Signs of Spending Too Much Money. Just as you did with the reasons you overspend, jot down a list of which warning signs apply to you. Each time you’re tempted to make a purchase that you weren’t planning on making, pull out your lists and try to convince yourself that the buy isn’t a good move.
Do you mainly shop with credit or cash?
Think about how you pay for what you buy. Do you make most of your purchases with a credit or debit card? If you need to find ways to stop overspending, put away the plastic! When you get used to paying with credit and debit cards instead of your hard-earned money, it’s too easy to overspend! If the goal is to change your spending habits, adopt a cash-only system for purchasing. Try it. For me, it’s much harder to part with cash than it is to pull out a card. It helps me think about what I’m spending – cash! Plastic takes that feeling away until the bills become due. It’s an awful feeling to realize you’ve overspent and are in debt at the end of the month as a result! Let’s get out of that habit.
But what if purchasing on credit can’t be avoided?
We all have become used to the convenience of online shopping! For me, there are a few reasons I do it. I’m saving money on gas by not running to so many different stores to find what I need. I also like how easy it is to shop online – I feel like it saves me time. But again, it can be dangerous! Anything that gets me out of feeling like I’m spending my hard-earned money can be a problem for me. I admit it – I love to shop (probably too much). So I agree, sometimes shopping with a credit card can’t be avoided.
So what can you do to make sure you don’t overspend? That’s easy – I immediately log on to my credit card and pay the amount I’ve just charged for my purchases. I don’t wait until the end of the month when the bill is due (and likely, when I won’t have the money allocated to pay it off in full). If I use “plastic” to pay for a purchase, I immediately pay off what I’ve charged.
Do you shop with a list? If you’re overspending, lists help!
This was a big help for me. I started making lists of what I needed to buy, just like I would make before going to the grocery store. I did this for all purchases no matter what the type: cleaning supplies, paper products, clothing, etc. Before I went to shop, I reviewed my lists to make sure I had everything jotted down that I needed. I also looked for things I didn’t need and could eliminate – I got very good at doing that when I felt like money was tight. My rule was simple as I shopped – if it wasn’t on the list, I wasn’t buying it. I took away a whole level of temptation by doing this! If I spotted something I felt like I just had to have, it was placed on a future list, and no matter what, I wasn’t buying it today.
Can you buy store brands or lower-priced brands rather than brand-name items?
I was convinced for the longest time that brand-name items had to be better than store brands. I was so wrong! When I shopped, I decided to start trying the store brands. Then once I tried them, if I decided I didn’t like them as much, I’d return to buying the brand-named items I had previously purchased. And in some cases, that’s what I did. But I’d say for probably 50-75% of what I was buying, the store brands were just as good if not better than what I was buying before (and paying more money for). If you need to stop overspending, an easy way to do this is just by changing your shopping habits a bit.
You might think I’m referring to groceries, paper products, and cleaning supplies. No, not at all! When I shop for clothing, I look for lower-priced store brands rather than the higher-cost “fashionable” brands. Every change I can make this way helps me control my spending.
Does everything have to be new? If you’re spending too much, think about that question!
This tip came from friends of mine when they moved into the area. Even though they could probably easily afford to buy everything new, they enjoyed the challenge of saving money by shopping for used items in certain cases. For furniture, they went to estate and yard sales to see if they could find the pieces of furniture they needed. When estate sales didn’t have what they wanted, they turned to thrift stores known for stocking decent furniture. New was only considered if used couldn’t be found after a substantial search. They did the same with kitchen items: dishes, glasses, serving bowls, trays, utensils, and small appliances. Why did it all have to be new? I have no idea! I’ve found some better quality items used than what was being sold new! If you can wash it, what’s the difference?
If you’re struggling financially, consider used for clothing too. I can’t tell you how many times when walking through a thrift store I find brand new items with tags still on them! I’ve spotted near-perfect quality jeans on sale for a few dollars! Can you tell me the last time you walked into a mall and bought a pair of nice jeans for three bucks? I can’t either! Again, if it can be washed, what’s the difference? When money is super tight, you do what you need to do to get by!
Let’s Figure Out How to Stop Overspending – It’s Time for a Financial Inventory!
The best way to fully understand how to stop overspending is to see where it’s happening. We’ve already identified your triggers. Plus we’ve discussed why using credit and debit cards to pay can be dangerous. Now it’s time for a financial inventory to see where your money is going.
Go Through Your Credit Card Bills
A huge eye-opener for me was reviewing my credit card statements. At first, I planned on just looking at a month or two, but then I realized that wasn’t enough. I wanted to understand exactly what I was charging. I went online and started by pulling up my credit card statements. My goal was to list every charge I had made and then figure out what that charge was for. It was easy with online purchases because I could refer back to the company where I was purchasing and see what I had bought.
When I was going through a recent month, I realized that I had things auto-billing to my credit card that I had forgotten. So I decided the best way to understand my spending was to go back through an entire year. I did this because some things bill monthly, but others bill quarterly, semi-annually, or yearly. I went through a full year’s worth of statements – this helped me understand how to stop overspending. And it helped me see how much money I spent on things I didn’t need!
Check Out Your Debit Card Statements Too
Depending on how you pay when you shop, you may need to do the same thing with your debit card statements. I don’t pay with my debit card, so this wasn’t an issue. But if you know you do, go through them and identify all of the purchases you made. Work on figuring out how to change your shopping habits.
Grab the Highlighters – Identify Wants versus Needs
Select two different highlighter colors. I used green for needs and yellow for wants. A need is something essential for survival. You might like to be able to buy a want, but you don’t have to have it to survive. Let’s think about the differences:
- Buying groceries you’ll use to prepare your meals is needed, but dining out is not!
- Healthcare costs like doctor visits or medications are needed, but getting a massage is likely not.
- Costs relating to shelter like rent, mortgage payments, insurance expenses, and utilities are needed, but buying items to decorate your home is not.
- Paying for transportation is necessary and a need, but that doesn’t mean you need your vehicle if public transportation is readily available.
- Clothing is a need, but designer clothing with high-cost accessories is not.
Use your highlighters to identify which purchases were because you needed them. Now highlight which were simply because you wanted them. This will help you get into the habit of considering this in the future as you shop.
Track Your Current Spending – for as long as it takes!
As I was doing my financial inventory, having gone through what I was buying and seeing how much I was wasting, I realized the need to drastically change from how I had been shopping. I was in the habit of if I wanted something, I bought it. I didn’t think about if it was something I needed – if I wanted it, I bought it. Is this familiar?
I began to think I needed to keep track of what I was doing as I was doing it! But only looking back at the past and what I had done wasn’t enough. I needed to deal with the present to fix my overspending problem!
I got a little notebook (make sure you have a pen!) or a budget planner – I carried it everywhere I went. Yes, some apps can do this, or you can do this with a spreadsheet. But I wanted it “in my face” so to speak! As I made every purchase, it went into my notebook. For each day, there was a date at the top. Underneath was the store name, what was purchased, and the cost. Thinking about what I was buying and writing it down helped me decide if I needed it BEFORE I made the purchase. Every day or two, I reviewed my notebook with my highlighters. My goal was to see only items that I needed. At first, it was a mix of both needs and wants. But as time went on, I improved. And you know what? You can too!
If you want to use a budgeting app, I have information on selecting the best one for you. My personal choice: Quicken Simplifi!
Delay Purchases Not on a List
Remember how I mentioned shopping with a list? This goes along with that. I explained that if something wasn’t on a list, regardless of how much I felt I had to have it, I wasn’t buying it that day. Those items were jotted onto a new list for a future day (preferably a few days into the future). Before you shop again and consider buying those items, think carefully – do you need them? For me, a good amount of what I jotted down were things I decided I wanted to buy on a whim! Cross off the things you know you can do without – your wallet will thank you!
Get a Handle on Food Costs
I’m sure I don’t need to tell you this, but food costs add up – quickly! To stop overspending, I changed how I shopped for food. Before, I’d run into the grocery store on my way home from work and pick up whatever I decided to make for dinner (without thinking much about the cost). Worse yet, on my lazy days, I’d order take-out or go out for meals. That adds up!
Now, I plan out my meals a week at a time based on sales. I shop once a week – that’s it! To see how I do this, read Create a Grocery List Based on Sales. I’ll share a sample menu for the week to give you ideas. I also provide Grocery Shopping Advice including identifying your key ingredients and your go-to stores where you know these items will always be reasonably priced. Then we’ll look at How to Make Dinner Fast – perfect for nights when you don’t feel like cooking. Each article includes a week’s sample dinner menu along with recipes.
The Dreaded B Word – Budget!
I’ll admit it – I didn’t have a budget for the longest time. And sure enough, that’s how I got myself into trouble! If you want to stop overspending, you need a budget. More than that, you need a budget that you’ll follow! There are many different ways to budget. For me, some were easy and some were a real pain! In future articles, I’ll cover budgeting methods I tried and share what I liked and didn’t like about each. It’s different for each person – find something that works for you. Have you heard of the envelope method or the zero-based budget? How about the 50/30/20 budget, pay yourself first, or the line item budget? Don’t worry – I’ll be covering these in future posts. In the meantime, if you want to read about how to make a budget, there are plenty of available resources on Amazon.
My advice is this – budgets only work if you are committed to sticking to them. There’s no real purpose if you’re going to cheat yourself! That’s who loses if you don’t – you!
Picture Why It Matters
Yes, I wanted to stop overspending. But I needed a goal. I needed to know why I was doing it! What do you want to save towards – is it a car? House? Vacation? Your child’s education? A nest egg of money you’ll have so you can do the things that matter? Whatever it is – you need to see it! Cut out or print out a picture of why you’re saving, and put it somewhere you can see it (remember when I said some things needed to be “in my face”?). Mine went on my refrigerator so I could see it every day. That helped me focus on my goal: to figure out how to stop overspending.
I wish you luck and success on your journey to control your spending! Yes, it’s hard, and you’ll likely make mistakes as you go. Just remember to keep learning from them and focusing on what matters!
One more idea – would it help if you could make some extra money? Here are 10 Ways to Boost Your Income.
Note: I am not a financial advisor or accountant. The information I’m providing should be carefully considered, as I am just sharing what I’ve discovered that was helpful for me. It’s important to do your due diligence and consult financial professionals before making decisions.
