Always finding yourself broke? Check your spending! If you’re overspending, these tips and tricks will help you stop spending money on unnecessary things quickly and painlessly. You might just be surprised at how much money you have!
Spending money. It’s a problem that most of us have had at one point or another. Maybe you had an issue with it in the past or maybe you’re currently having an issue where you’re stuck and don’t how how to stop spending money. If so, it’s okay. We’ve all been there. I would be lying to you if I told you that learning how to stop spending money – especially on unnecessary things – is easy. It’s not, but there are things you can do that will help you re-teach yourself how to be great with your money and how to build good, healthy spending habits.
How to Stop Overspending
I am not ashamed to admit that overspending is an issue that I myself have struggled with quite a bit. In fact, it’s an on going struggle for me and one that I have to constantly put myself back in check for. In other words, if I allowed myself, I could easily become a habitual overspending.
I think most of us are like that if I were to be completely honest.
Learning how to control your overspending and how to stop spending money on wasteful things is the single most important thing someone can do for their budget. Sure, knowing how to create a budget (Six Dollar Family) is important. Yes, knowing how to build wealth is important (Six Dollar Family), but all of those things are moot if you are overspending.
Because overspending will ultimately cause you to go broke.
Spending your money well at its core ultimately boils down to teaching yourself a new financial habit (Six Dollar Family). It’s a financial skill that everyone should have (Six Dollar Family) but unfortunately very few learn.
Which brings us to this post and how to teach yourself that new habit.
How to Stop Spending Money on Unnecessary Things
If you really want to learn how to break a spending habit, read on. It won’t be easy and it will take some self discipline to really do, but in the end, it is worth the time and trouble.
Know Why You’re Overspending
Every single person who has a problem overspending has a reason they do so. Boredom or emotional shopping are two of the biggest. For me personally, it can be both just depending on the day.
Just like any bad habit, if you don’t know why you’re doing it, you stand very little chance of breaking it. Knowing why you’re overspending gives you the first tool to being able to stop yourself the next time the issue pops up.
Know Your Wants and Needs
Part of the reason that most of us overspend is that we confuse our wants with our needs. The simple truth is that a lot of the time we think we need something when it really is a want.
To be blunt, human beings only have a handful of true needs. The rest are wants; pure and simple. And if you don’t learn how to tell the difference, you will never overcome a spending habit.
Basically, it boils down to this: Your needs are food, water, shelter, clothing and transportation to get to work.
Audit Your Bank Account
The next step to teaching yourself to stop overspending will require you to take a real, honest look at your bank account. with a hard audit of your spending.
Normally, I tell people to do the past three months of spending but if you are already aware that you have a spending habit, you can skip the “becoming aware of your spending habits” step.
Instead, do a full audit for the past 6-8 months at a minimum. In fact, a year is actually best to provide a much better picture of your spending but a six month minimum is a good place to start. By the end of the six months, you should have at decent idea of where your money is going and exactly how you’re overspending.
If you’ve never done a full spending audit, it’s not as hard as it sounds. You will need a spending tracker. I like THIS printable spending tracker (Etsy) but if you prefer an actual book type, THIS account ledger (Amazon) is also one of my favorites. I use the printable version for our family finances and the hard copy for my business accounts.
After you’ve decided which to use, scour your bank account for each category type of transaction. Keep a running total of each category so you’re able to see where your biggest spending issues lie.
Re-Create Your Budget
After you have your bank accounts audited. you’ll want to completely recreate your budget. This step is especially important so do yourself a favor and don’t skip it.
Take your bank account audit and make a list of any unnecessary wants you’re paying for. Before you get started recreating your budget, cancel anything that needs cancelled. Do it now so you avoid being charged again.
Next, make a list of your true needs. These are the categories – and the only categories- that should appear on your budget. Take any “want” categories out of your budget and re-create it so it fits your new non-spending attitude.
Stay in Your Budget Often
Having a recreated budget is only the first step. If you simply create your budget and then put it away, you’ll stand a very, very good chance of forgetting it and finding yourself right back off track again.
Out of sight out of mind applies here.
Instead, stay in your budget. In other words, check it and update it everyday. In fact, at first, you should update it as “real time” as you can. Doing so will keep it in the forefront of your mind and make it less likely that you will overspend.
Stay Out of Stores (or Websites)
If you’re trying to learn how to stop spending money on unnecessary things, the worst thing you can do is spend time in stores or on websites that encourage you to spend money.
It might seem silly but it’s basically just teaching yourself to avoid temptation.
The more often you’re in the store, the more you’re going to spend. Impulse buys, paying higher non-sale prices, and more will keep you spending money on things you don’t necessarily need to or want to.
This also includes your email. As you’re working on breaking your spending habit, take the time to unsubscribe from any marketing emails from websites that want you to spend money too. Things like store websites that you’ve placed orders with and more can all help you overspend. After all, some of those deals are really good.
Your inbox shouldn’t be a financial temptation.
Have a (Few) No-Spend Months
Have you ever heard of a no-spend week or month? While I don’t believe that no-spend months really fix the problem of a spending habit (Six Dollar Family), they will help you to stop spending money long enough that you can build a starter savings.
If you’ve never done a no-spend month, the concept is pretty simple. You only spend money on your absolute needs and do not buy anything that is not a need or is unnecessary. It can also be helpful to start smaller if you’re new to a spending pause. Starting with a week and working up to a month or longer is best.
If you’re familiar with them and have done them before, try to go for a longer time periods. A month is a great start and will give you a great opening to a longer time period. Yes, longer spending freezes can be done. In fact, my own family is getting ready to start a year long long spend challenge at the beginning of 2021.
This applies if you’re trying to stop spending money on food as well. Doing a pantry or freezer challenge works great for helping to stop overspending very quickly. To do one, use a pantry and freezer inventory like THESE (Etsy) to make a list of what you have available. Then, makes meals only from those ingredients for whatever time period you have set.
Lock Your Debit Card
I could end this post by telling you to use cash only, but honestly some people just do not do well with cash spending. I am one of them. If I have cash, I spend it far quicker than I do if I use my debit card instead.,
But there’s one reason for that. I keep my debit cards locked.
The reasoning behind it is the same as people who use cash only. When your debit card is locked, you have to physically open your banks app and unlock it to spend money.
Doing so makes you far more aware of the money you’re spending.
