16 Ways to Stop Overspending & Signs That Say When You Are

For some people, money seems to go more easily than it seems to arrive, at least until we learn to budget properly and begin telling our money exactly where to go.  I understand completely because I once had piles of debt.  I’ve been there.  It took me years to finally learn how to master my money but I don’t want it to take that long for you.  I am going to share what I’ve learned so you can shave years off of your learning curve.  Comprende?  I’ve created these tips specifically to help springboard you into prosperity.  Until you’ve mastered your money mindset, money may seem a very difficult thing to control.  However, once you get it, it becomes as easy as perspiring.  You don’t think about breaking a sweat and you won’t have to think about money.  It will just flow to you. 

Right now, expense after expense may come up leaving you with more month than money.  I understand how stressful that can be.  However, we are often – ahem, more often than not – the culprits behind our overspending.  Until you get a handle on where your money is going, you will never be financially free.  Remember, though, step one is being: getting your identity straight in regards to money.  For that, you should read our money mindset blog here.  Step two is doing.

Here are some great tips on how to avoid overspending and relieve the stress of being financially strained forever.  Okay, I need a shorter title.  How about, “16 Ways to Stop Overspending.”  Perfect.  Let’s keep it simple.  Follow even a few of these tips and your financial health will improve.  Follow them all and you’ll be sipping Mai Tai’s on the beach when you retire.

1.  Use Cash Only:   It may be time to leave your credit cards at home and deal with cash instead.  Studies show consumers spend more when they use any type of plastic, whether debit or credit cards.  When we spend cash, however, we tend to think longer and harder about our purchases and we spend less.  Our mind “feels the pain” of parting with each hard-earned dollar when it sees it make its departure from our wallet.  “Goodbye, little dollar.”  The physical release of something is much harder than a virtual one.  When you use plastic, even if it’s a debit card coming directly out of your account, there’s an emotional disconnect.  It’s just not as painful.  You can also learn to use the envelope system of budgeting and spend cash instead of using plastic or writing checks all the time.  I highly recommend this method for those new to budgeting or those who tend to overspend consistently.  There’s a reason why they say “Cash is King.”

 2.  Put a Hold on Your Credit Cards:  If you have a hard time using cash, call your credit card companies and put a hold on your cards.  Do NOT cancel them, as that will negatively affect your credit score and we don’t want that.  Putting a temporary hold on your cards will keep you from using them yet allow you to keep them in case of emergencies.  It will also force you to use cash.  If you don’t have cash, you won’t be overspending.  If you don’t want to put an actual hold on your cards, you can always freeze them…literally.  Some people put their credit cards in a plastic bowl full of water and then freeze them into a solid block.  You will have to wait about 24-48 hours for it to defrost because you can’t microwave a credit card.  Then you’ll know if you really need the item or not.  Either way will work.

 3.  Depend on a Shopping List:  I am a lover of lists.  This was how I made huge changes in my spending habits.  I made a list of everything.  If something wasn’t on the list, I didn’t buy it.  If I saw something in the store I thought I needed, I wrote it down on a 48-hour hold list.  I would go back to it in 48-hours and if I still thought I needed it, I would get it.  Most things didn’t pass the test though.  If you have children who shop with you, put a treat for them on your shopping list.  Teach them, “if it’s not on the list, we don’t buy it.”  That’s good parenting.  You are teaching them responsible spending habits and the younger they learn, the easier it will be for them to be financially responsible adults.

 4.  Become Unemotional When Shopping:  If you hear yourself say you love something while you set it in your cart, stop immediately.  Love is an emotion.  We don’t shop with emotions.  We shop with purpose.  If spending money makes you feel better, watch out.  You just may have a psychological addiction to spending and that can be serious.  There are groups and counselors for you if you fall into that category.  However, it’s important to realize that we should always keep our emotions in check when shopping.  Think of it as if there is a war out there.  Retailers do all they can to trigger our emotions, from the way they place items to the color buttons they use online that say “add to cart.”  (Orange is an impulse buy color)  Their job is to sell as much as they possibly can.  Our job is to stay unemotional and on task.  We may have to shop, but let’s be as unemotional about it as possible. 

5.  Create a Budget:  If you don’t have a budget by now, you need one.  Having a budget is a no-brainer.  Budgets aren’t four-letter-words.  They don’t restrict us unless we make them that way.  What they do is help us tell each and every penny we earn where we want it to go and what we want it to be used for.  A budget empowers us.  I once read we should give every dollar we earn a name.  Awe, how cute!  I love that.  This little dollar is Rashelle.  This little dollar is Tony.  But that’s not what it meant.  It means that we give each dollar a name or a job.  So, Rashelle can be rent and Tony can be savings.  Budgets allow us to orchestrate our spending like a great symphony.  It’s beautiful, really.  Click here to learn how to create one.

 6.  Keep the Big Four in Check:  You should keep a close eye on what you spend on Rent, Food, Clothing, and Entertainment: the Big Four.  These four categories are typically where people overspend and they should be the four categories you watch the closest.  Don’t let them get out of control.  Always do your best to shave off whatever you can in the Big Four, within reason, of course.

 7.  Don’t Shop During Sales:  I know this sounds counterproductive but the majority of the time it is not.  Chances are, you have pretty much all you need right now.  You may not have all you want but you probably have all you need.  When we search through sales ads we find a bunch of stuff we want and not very much we need.  With the exception of items you know you buy or need, you should keep away from sales ads and your favorite stores when they are having a sale.  It will only encourage you to buy more of what you don’t need.  Of course, there are exceptions to this rule, but only when you become a disciplined shopper.  If you’re still not quite there, don’t take the chance of blowing your budget on another pair of shoes you don’t need.  Even 50% off of shoes you don’t need puts you whatever you spent on those shoes over budget.

Also, don't be a Scroller.  I may have made up the word but Scrollers scroll through ads on websites looking at pictures of various items, sometimes sales items and sometimes just items for sale.  Don't do that.  If you do it, stop doing it.  This is a terrible waste of time and money.  Psychologically speaking, it messes with your head.  You don't know what you're missing, so why waste your time finding out.  Stop it.  Be content with what you have and where you are now.  Scrollers are losers.  Don't be a scroller.

 8.  Set Financial Goals:  When you have a budget, you are in control of your money.  Each and every little dollar that passes through your fingers is being controlled by you.  It feels great.  What feels even better, though, are setting and achieving financial goals.  When you set a goal to pay off all your credit cards and you achieve that, the feeling is ecstatic.  Having no debt gives you the feeling of freedom.  It’s just amazing.  Setting savings goals and retirement goals are just as powerful.  The more you believe, the more you achieve.  The more you achieve, the more you believe.  There are no limits to the life that you can create when you begin setting and achieving your financial goals. 

9.  Delayed Gratification or “Wait for It”:  This rule can have many names; the “wait for it” rule, the wait 48-hour rule, the wait 30-day rule, or the delayed gratification rule.  It doesn’t matter what you call it.  The only thing that matters is that you do it.  If you want to buy something not in your budget or not on your list, you have got to get into the habit of waiting for it, saving for it, and planning for it.  Impulse buying is the enemy here, the budget-blowing, overspending enemy of our well-thought-out budget.  We have got to disarm it by not allowing ourselves to buy on a whim.  Instead, we apply the waiting rule for things we think we need: 48 hours for small things and 30 days for larger items.  When I delay, I usually forget all about whatever it was I thought I couldn’t live without at the moment.  Guess what?  I’m living without it now and you will, too.

 10.  Snap Your Wrist with a Rubber Band:  I have a friend who saw this on the web somewhere and used this trick.  I love it.  She said that each time she is in the store and wants to put something in her cart that’s not on her list, she snaps a rubber band that she wears around her wrist.  She said the pain helps break her shopping pattern, a pattern that usually makes her feel good.  Snap!  “Well, that doesn’t feel good.  I guess I don’t need it.”  This may be just what you need to break your habit, too.  Snap!

11.  Look at Your Spending Habits:  Do have an idea or record of how much you are spending? This may sound like an obvious question but you might be stunned at how many people struggle with that question. Take up the challenge of making a list of all your spending and bills for a month. When you analyze where your money is going or how your money is being spent, you will definitely see patterns and can then work towards controlling your spending. When you have your expenditures well sorted out on paper, it will show you the categories which present opportunities to reduce spending and also highlight potential reasons why you spend more than you should.  Numbers don’t lie.

 You can also analyze your spending habits by using a tool that allows you to quickly figure out or know where your money is going: one that can help you in making smarter spending choices. An example of such a tools is “Discover Spend Analyzer.”  Whatever method you go with, the most important thing is to decide on an option that works well for you and don’t be afraid to try out something new if one method fails or doesn’t work for you.

12.  Make a plan:  Creating a Budget and knowing where your money is going is the first step in managing your spending. However, the important aspect of it all is having a plan in place on how you are going to tackle overspending.  Would you start a diet with a pantry full of cookies?  No.  Not if you wanted it to work.  You would have a plan and it would probably include getting rid of all the junk food in your house.  Same concept here.  If you really hope to reach your financial goals, it is essential you master the discipline of spending less than you make and have some kind of plan set in place for moments of weakness when you want to splurge a little but know you shouldn’t.  Just like a person who wants to stay fit must conquer the habit of overeating or eating the wrong things: you can’t be successful without it.

 Making a plan to cut down your spending doesn’t have to be complicated.  In fact, there are numerous options to make the whole process easier. In case you are not aware, most banks offer online budgeting software at no cost and there are also dozens of great smartphone apps that make budgeting simple.  Huffington Post’s top 5 last year were Wally, Level Money, GoodBudget, Unsplurge, and Mint.  I personally like Mint, but you have to find the one that works for you.  What’s super cool about all the new technology out there is it makes it so easy to organize your transactions and spending.  Budgeting software categorizes transactions and creates a monthly budget automatically based on your average spending, making a baseline budget and tracking how you spend your money fairly easy.  You just have to set the plan in motion and come up with how you’ll handle tough scenarios. A little effort equals great results in no time.

13.  Put extra money towards debt and savings instead of spending:  A mistake people often make when they are living within their means is failing to save enough.  If they have an extra $50 a month, they put it towards entertainment or eating out instead of putting it away for a rainy day or, better yet, paying off debts.  Make certain that you don’t make this mistake.  Adjust your budget accordingly and if extra money appears, put it towards paying off your debts or place it in savings.  No matter what your age is, you should be maxing out your contributions to your IRA each year and always save as much as you can.  Make certain you are setting your priorities and taking control of every penny you earn.  Every month you should be paying yourself first, 10% into your savings, 10% into your retirement, and 10% tithing.  You may not be able to start there, but that should be your goal.  Once extra money shows up, set up automatic transfers right from your checking account to your savings and/or retirement accounts before you get the chance to spend it.

 14.  Set money goals & then give yourself a treat:  Whenever you have successfully avoided over-spending by staying glued to your budget, try and do something really nice for yourself without using money, like sleeping in on your day off.  Tell yourself, “I get this extra hour of sleep because I’m so darn good at sticking to my budget.”  Compliment yourself on a job well done.  Celebrate little wins and big ones.  When you pay off a big debt like a credit card, take yourself out for a special treat.  For something that monumental, you could get a brownie sundae at Ghirardelli’s.  They are a little bit of a splurge, to say the least, but a definite reward if you’re a chocolate lover like me.  Time alone reading a good book or watching a movie can also be a reward.  Delaying gratification is an extraordinary self-discipline that every great leader and entrepreneur has mastered.  It encourages you to get things done and is one of the most beneficial self-disciplines.  Setting money goals, like paying off bills or saving a specific amount, is a pretty big deal when you first get started.  Celebrating each little victory keeps your spirits high and your momentum going.

 15. Look Into Your Future:  So many times we make purchases we think we need or will make our lives easier.  Then, a few years down the line we have a storage unit full of those items or a dozen appliances under our cabinets we’ve only used once or twice.  If you’re having trouble sticking to your new budget or shopping list, use your psychic abilities. Look into the future and imagine how you’ll be using this “must-have” item a month from now.  Will your kids still be playing with that expensive game in 6 months?   Will that owl statue actually fit on your fireplace?  Will those fake leather heels start rubbing blisters on your feet? 

My husband and I have five children and now they are all married and moving out except our youngest.  Earlier this year, we downsized.  We sold our 5 bedrooms, 5 baths, 5,000 square foot home and moved into a smaller single story with a kitchen the fraction the size of my old one.  Moving was an eye-opener.  We had so much, uh, “stuff.”  We had a garage sale and no one would give us a fraction of the price we paid for our nice “stuff” either.  Seriously, I saw a lady in my neighborhood selling her Precious Moment Collection for $5 each AND NO ONE WANTED THEM!  She had two baker’s racks full of them, too.  Nine times out of 10, you don’t need it so just put it back  OR picture yourself selling it in a garage sale 10 years down the line for 1/10 the price or even 1/100th!  I sold a dining room set for $50 I paid $10,000 for!  Seriously.  The chairs were $250 each but no one cared.  No one wants your “stuff” and it is NEVER EVER worth what you think it is. 

So, what if you insist and still decide you want it?  Then, see Rule #9: Wait for it.  But my crystal ball shows a garage sale in your future.  And if you happen to leave the store with more than you bargained for, take it back. That’s what receipts are for. 

16.  Disincentivize Spending: Start by picking a cause you don’t believe in — like the opposite political party or a cause that just makes you nauseous.  Next, strike a tough deal with yourself: For every dollar that you spend over and above your monthly budget, you must give 50 cents to that organization and it comes out of your designated preferred charity. (Even better: Share the terms of the agreement with someone who’s close to you and will help keep you accountable.)  Psychologists say it stirs things up because it targets your sense of self and basically goes against who you believe yourself to be.  Going against your deepest values should be persuasive reason enough to keep your wallet in your purse when tempted to overspend.

All these steps are designed to help you and your family gain control over your finances.  Make certain you are honest with yourself and don’t tighten the thumbnail screws too hard.  However, the less you spend now, the more you will have to spend later.  Go over your budget often and plan your future expenses with care and diligence.  If you sincerely wish to be prosperous, you must create good spending and saving habits now and not later. 

Lastly, look for signs that you or your spouse are overspending.  Here are a few warning signs or items that, if you see them, need to be corrected quickly. 

·  Maxed out credit limits on your credit cards

·  Only paying the minimum amount due on your cards each month

·  Spending more each month than you make

·  Not having a budget or going over your budget

·  Paying for the doodads (frivolous items you don’t need but want) first instead of the real bills

·  Spending more than you make way too often, aka more month than money

·  Always increasing your expenses along with your income

·  Your savings is empty but your closet is full

·  You have a storage unit

November is all about shopping smarter: spending less and saving more.  We want you to be ahead at the end of 2017 and not in the red.  November 3rd’s article, “14 Ways to Shop Smarter this Holiday Season,” can give you some great ideas about how to make smart shopping choices during this holiday season.   Stay tuned for more insightful blogs and programs designed to create prosperity in your life and a better Christmas Season.

Michelle R Russell

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