So, you want to stop spending money. That might be easier said than done. When it comes to managing your money, there are things you need to do. You know you need to budget, try to get out of debt and control your spending.
The issue is not necessarily that you are spending money on things you don’t have; you just aren’t spending it in the right way. The issue is not that you don’t make enough money, it is just not having a plan on how to use it once you get it.
That’s what happened to me. Unfortunately, I didn’t have a plan for my money. That lead me down a path I did not like.
After years of working without a plan, I found myself on the steps of a courthouse declaring bankruptcy. And, because I did not learn how to make the right changes in managing my money, my husband and I found ourselves in debt a few years later.
The difference with the second time I had debt was that I took responsibility for it. I owned what happened, and he and I worked together to make changes to not only pay off our debt but never go down that same road again.
If you find yourself in the same situation, you need to make big changes. To start, you have to stop spending money you don’t have. Plain and simple.
HOW DO YOU KNOW IF YOU ARE OVERSPENDING?
You’ve maxed out your credit cards
When there is no room to charge anything on your cards, you might have a problem. In most cases, maxed credit cards signals you are living beyond your means. If you have to continue to charge because you don’t have money, then you are spending too much.
You can’t find a home for your latest purchase
Your temptation might be electronics or handbags. No matter what you love to buy, you might notice you are running out of room to store things. When the stuff takes over your home and is causing clutter, it is time to take a long hard look at how you spend money.
Your budget never works
There may be months when you don’t have enough money in your budget to cover your mortgage or food. When you continually spend money on the wrong things, your budget will not work.
That means if you have just $50 for entertainment, do not spend $75. That other $25 has to come from another budget line.
You spend more than you earn
Take a look at your credit card balances. You might be paying only the minimum balance because you can’t pay it in full. When you spend more than you make and continue to add more debt, take a look at what you are buying. It might be time to pull back and stay out of the stores.
HOW TO STOP SPENDING SO MUCH MONEY
Use a budget
When many people hear the word budget, what they hear is “you don’t get to spend any money.” That is the opposite of what a budget does. Your budget is a roadmap. It shows you where your money should go – including the fun money you want to spend!
Your budget helps you know what you need to do with your money when you get paid. Look at every penny as an employee of yours. You get to tell it where it needs to go. Some of them will go to rent, others to your car payment and still others will go to the into your savings account.
The best part of a budget is that you can allow for fun. Learn how to budget to have fun and even how to budget if your paychecks are never the same amount.
Write down your financial goals
Successful people start planning by having the end in mind. It may mean taking a backward approach to your finances.
Think about what you want. Do you want to get that credit card paid off or maybe take that dream vacation? No matter your goal, figure out what it will take to get there, and that will help you set your goal.
It may mean fewer dinners out or putting in some overtime at work. Whatever your goal, make sure it is clearly defined and you keep it front and center. Put it on your refrigerator. Keep a photo of it in your wallet. Make sure you see that budget staring you back in the face every time you even think about spending money. That will usually stop you right in your tracks.
Cash is a Must so that you never overspend
If you are someone who is always saying “I can’t stop spending money,” then you need to use cash. I’m sure you’ve heard it time and time again. Using cash is one of the simplest tricks to help you stop spending money you don’t have.
It works because it gives you defined money. If you have $100 to spend at the grocery store, there is no way you can even spend $101. You don’t have it. You are forced to spend wisely and think more about every purchase you make.
I know some of you are reading this saying “but if I have cash I just spend it so fast.” That is because you are not tracking it and taking responsibility for your spending.
You need to use the cash envelope method.
If you have an envelope for groceries with $50 left in it, sure, you can dip into that and grab $20 to spend on lunch. But, what happens when you need food for your family? That means you’ve just $30 to buy food – which may not get you much.
Cash forces you to think about every purchase you make.
Stop paying for convenience
There is a quick fix for nearly everything. You can find dinners in boxes, small pre-packaged snacks, etc. Rather than purchase convenience items, buy the larger size snacks and then re-package yourself into smaller baggies. You will not only get more out of a box, but you can even control how much you put into each baggie.
There are other ways we pay for convenience. We pay for someone to iron our shirts, wash our cars and even mow our lawns. By doing these things ourselves, we can keep much more money and easily stop overspending.
Read more: How You are Killing Your Grocery Budget
Put away the credit cards to halt spending money
One of the simplest ways to stop spending money is to get out the scissors and cut up those credit cards!! Or, if you aren’t ready to cut them up, put them on ice. Literally. Freeze your credit card in a block of ice.
If you keep spending, you have to cut off the source at its knees. While I don’t think credit cards are a good fit for everyone, I know they work for some.
If you must use credit cards, never charge more than you have in the bank to pay it off. That means you can’t charge the amount you believe you will get on your paycheck. There is never a guarantee that your check will arrive. Spend only the amount you have, not what you will receive.
Related: How to Pay off Your Credit Card Debt
Pay your bills on time
We all have bills. We know when they are due. When you miss the payment due date, you get assessed a late charge. Pay them on time, so you don’t pay more than you need to.
Do not live above your means
Few of us would not love new clothes or a new car. We all would like to make more money or get the hottest new device. The thing is, can you afford it? Is it a want or is it a need?
If you are using credit or loans to get items that you can not afford, then you are living beyond your means and spending money you don’t have. Scale back and make sure that you can honestly afford the house or the car and that it doesn’t ruin your budget and cost you too much.
Read more: Defining Your Wants vs. Your Needs
Don’t fall for impulse buys
Stores are sneaky about making us spend money. They use signs, layout and even scents to lure you into wanting to buy more. The thing is, if you purchase something you did not intend to, then you are already blowing your budget and probably overspending.
Another way that you are spending too much is when you plan dinner but then decide at the last minute to go out to dinner instead. Why do that when you have food waiting for you at home (which you’ve already paid for)?
The final reason you may impulse buy is that of emotion. If you feel a rush because of that new item, you may purchase out of impulse and emotion instead of need.
Read more: Stopping Impulse Shopping
Plan your meals
One of the most significant changes we made was to menu plan. It took me some time to put it all together, but now, I can plan our meals in no time at all. I use the simple menu planning system that I’ve taken time to build over the years.
While this works for me, I remember when I was learning how to menu plan. It was quite a process, and I relied upon the help of some experts in the field. One of them I have used is Erin Chases’s $5 Meal Plan. I loved how simple it was to create our meals each week.
Even the best menu plan won’t work if you aren’t eating what you buy. Make sure you are not making mistakes with your grocery budget and eat what you buy. After all, throwing food away is just money in the trash.
Challenge yourself to spend less
There is something fun about trying to beat yourself at your own game. By this I mean, if you have $150 to spend on groceries for the week, try to spend only $130. That gives you $20 more to spend on something else — or put towards your goal.
Stay out of the stores so you don’t shop
If you can’t control your spending and continue spending money you don’t have, you have to remove the temptation. Even something that seems harmless can result in spending money.
Related: Fun and Frugal Date Night Ideas
Track the money you are spending
Keep track of your spending by adding up the amounts on your phone. That way, you’ll have no surprises when you get to the checkout lane. You can try Shopping Calculator for Android or Total-Plus Shopping Calculator on iTunes.
When you start to see that total creep up, you realize how much you are spending. That may help you think twice about that extra box of treats you are tempted to toss into the shopping cart.
Use the three-day rule before you spend a dime
The three-day rule is pretty simple. If you see something you want, wait for three days before you buy it. Once the third day is up, ask yourself if you still feel it is something you need.
If it is, look at your budget to ensure it works with this month’s spending. Then, double check the cash to make sure you have enough to pay for it. If both of these work, you can consider buying it.
The funny thing is that most purchases are impulse buys and the three day waiting period helps you realize you don’t need it. And had you purchased it, you may even have buyer’s remorse at the three-day mark.
Don’t use coupons and skip the sales
Sales are very tempting. They lure you in and often result in making purchases you would not do otherwise. That is why you nee your list. Stick to it and don’t fall for the sales.
You also need to put away the coupons. Well, you can use them, but responsibly. If you would not purchase an item at full price, you should never buy it only because there is a coupon. A coupon is not a golden ticket to shop.
In addition to this, avoid the clearance aisles and end caps. These are money spending traps! You walk by, and your eye is drawn the end cap with the big SALE sign in front of it. If you don’t need that item, don’t grab it. Also, don’t walk by the clearance section. It is very easy to pick up items you don’t really need. That makes you again spend money you had not planned on.
Instead, shop the sections you need. If you need detergent, go to that section and grab your item and then go to the next on your list. Don’t wander through the store as you will be more likely to do “cart tossing.” This is when you put items in your cart without noticing what you are spending.
I’m not saying not to buy anything on sale. Just get the things you need that are on sale this week, or that you will need in the next weeks. You probably need spaghetti noodles, but you don’t need a new pair of shoes.
Related: The Money Traps You Will Fall For
Never shop without a list
Never shop without a grocery list. Ever. Then, force yourself to stick to it.
Some simple ideas include using a timer to limit how long you can be in the store. If you have only 20 minutes to shop, you will be less likely to grab the items you don’t need and stick with those that are on your list.
Another is to challenge yourself to see how fast you can finish your shopping. If you have the list and stick to it, you’ll find you spend less time shopping and more time enjoying the things you love.
The best reason to use a list is that you don’t have to worry about forgetting that “one item” you know you need. When you force yourself to make a shopping list and stick to it, you’ll always have everything you need on hand for dinner.
Keep emotion out of shopping
One tip is never to shop hungry. When you do, your stomach controls what you buy. The added benefit is buying the healthy foods you need.
If I am feeling bad about myself, buying something I have been wanting may end up making its way home with me. Spending money to make myself feel better never works.
There are many emotions attached to spending. You have to identify which one(s) apply to you and find a way to fulfill that need through another method – other than spending money.
Define Needs vs. Wants
There are items we need. You need food, but do you need the extra box of cookies? Yes, the sweater is really cute but is it something you need or just something you want. Ask yourself “is this a need or a want” with each item you buy. You’ll soon be on your way to less overspending.
Clean and declutter
When you declutter, you find all of those items you’ve spent money on and no longer need. It makes you realize where you are spending. You will also recall how clean your closet now is. Do you really want to fill it back up with more stuff?
The added benefit of decluttering is that it keeps your house clean and organized! You can find what you need more easily and don’t have so much “stuff” cluttering the house.
Save first, spend later
It is important always to pay yourself first. Remember that the amount you have to spend is what is left over after you pay your bills and pay yourself.
You should always tell your money where to go instead of it deciding for you. So many do that the opposite and save after they spend. If you still save a little, you will quickly build a nice emergency fund and can have less guilt about your spending.
Learn from your mistakes
The most important thing you must do is figure out where you’ve gone wrong in the past. Your mistakes will be different from everyone else’s. You may shop out of emotion while someone else does out of boredom.
You also need to keep in mind that you will make mistakes. There will be months when you fall off the wagon. Don’t beat yourself up over it. Use it is a chance to learn from them and do what you can to not repeat them again.
Gaining control of your spending is possible. You just need to have the desire – and the tools – to make it happen.