7 Tips That’ll Help You Stop Overspending
This post was last updated on October 11th, 2020
Do you find yourself setting spending limits and then blowing past them regularly? Is your budget great on paper but in reality, it doesn’t quite work out? If so, you might be overspending in a few hidden areas that you don’t even notice!
Unless you write down every single penny you spend miserly, there are bound to be a few dollars here and there that slip through the cracks. The problem is when those few dollars add up to entire bills that could’ve been paid or they replace necessities.
If this sounds like your regular routine, it’s time to master your money. When you’re ready to break the paycheck-to-paycheck cycle and gain control of your finances, try these seven tips to help you stop overspending.
1. Notice Your “Tells”
Like in the game of poker, we all have “tells” we don’t realize we’re doing. These are the things we subconsciously do that give away what our next actions are. In the form of shopping, when you know your “tells,” you can watch for your spending habits.
Some people overspend because they think they absolutely have to have this new thing. It becomes so important to them that they see it as a need instead of a want, and they spend money they don’t have in order to get it.
This usually happens when you’re emotional and shopping, or when you think you have to keep up the spending habits of someone around you.
Other ‘tells’ happen when you have a conversation in your head in which you try to persuade yourself to buy something. You tell yourself you deserve it because you work hard, or went through a rough patch. This attempt to convince your smarter self through an emotional appeal should be a red flag.
Start paying attention every time you pull out your wallet and you’ll probably notice your own tells!
2. Find a Budgeting System
If your budgets haven’t worked in the past, it may not be entirely your fault. You might not have found the right one!
To start with your budget system, first you need to know if you’re a paper, a smartphone, or a computer person. That will lead you in the direction of an app or template that will work better for you.
Do you mind paying a little for a good budgeting program, or would you prefer the free ones? That narrows your options down a little bit more.
From there, pick one that looks like something you’d easily use. It has to seamlessly transition into your financial routine or it will be hard to stick to. Give it a couple months and use it to track your spending. Gradually, you’ll notice your budget gets closer and closer to being on target!
3. Start a Money-Making Habit Instead
While you’re working on cutting corners with your purchases and finding ways to save money, a second job would be ideal. But if that’s not possible, there are lots of ways to make a few extra bucks right from your phone.
An easy way to get started is to sign up for a couponing app like Ibotta. You can get cash back with every shopping trip just for scanning your receipt.
Survey lovers and game addicts can make a bundle doing both in their downtime on the phone. Programs like Mypoints and Swagbucks reward you with gift cards and cash to complete simple tasks.
With a little online rooting around, you can switch your ‘time wasters’ to ‘money makers’ and stop feeling guilty about too much screen time!
4. Make a “One In, One Out” Mentality
To curb your urge to impulse buy, a main culprit of overspending, it can help to adopt a “one in, one out” way of thinking. In this practice, you think strategically before you bring anything new home.
If you buy a piece of home decor, you have to get rid of something you already have. A new item of clothing means you donate or sell an old one. One in, one out, for anything you spend money on outside of your budget.
5. Put Away the Credit Cards
Credit card debt in the United States hit a staggering $1.08 trillion at the end of 2019. The average household has almost $9,000 in credit card balances at any given time.
With an average APR of 19% for people with good credit scores, it can take years to pay off that much debt if you’re making the minimum payments.
It’s easy to convince yourself you didn’t actually spend the money if you put it on a credit card. But, is whatever you’re buying really a good deal if it ends up costing you up to ten times as much by the time you pay it back?
Cut up those credit cards or put them in a locked safebox and only buy if you have the cash on hand (or in your checking account).
6. Look for Deals
We work hard for our money, so it makes sense that we want to reward ourselves occasionally.
What’s your go-to indulgence? You can still partake in it. After all, you did the work! But is there a way you can have fun and save money, too?
If relaxing at the end of a long day at a restaurant is something you enjoy, find discounts and BOGO nights. Sign up for the email clubs and head to the places that you have coupons for.
Shop around for the best prices online and look for free shipping. There are plenty of ways to reduce your spending without chopping it out of your life completely!
7. Make a List
No, not a shopping list.
Successful entrepreneur Darren Hardy, author of the bestselling financial advice book The Compound Effect, suggests we make a list of every bad habit we have in order to fix it. In this case, it’s how you spend your money.
Get a small notebook you can keep in your pocket or your purse. For one week straight, write down every purchase you make, down to the penny.
This works in two ways. First, it makes you aware of where every bit of your money goes. But it also causes you to think twice about those little splurges when you know you have to write them down.
After one week, you should be able to see a pattern and recognize where your overspending tendencies are.
Conclusion
When you’re serious about getting a handle on your money, the first thing to do is to curb your overspending habits. But to do that, you need to realize where they are!
These seven tips teach you to recognize your habits and become a smarter financial spender. With them, you’ll have a more stable financial future all around!
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