No matter where or how we shop, the temptation to overspend on random stuff follows us everywhere we go.
Yup, we’re talking about the aisles right next to the store’s checkout lane. Mini hand sanitizers, gum and that magazine with the latest news on the royal family?! It seems they’ve thought of everything—or that’s what they want you to think.
With so many ways to shop (online, on our phones and in-store), how can we avoid making mistakes that bust the budget? Don’t worry, we’ve got the scoop on how to stop spending money so you can start actually winning with money.
Reasons Why You’re Overspending
People spend money for so many reasons, and if we’re just a little honest with ourselves, most of those reasons can be chalked up to emotions. Many times, we can blame our overspending on five things:
1. Social Media
Need we say more? Picture it: It’s Saturday morning, and before you realize it, you’re scrolling through your social media feed to catch up on what your friends are up to. And before your feet even hit the floor, you’ve spent $30 on that new, life-changing thing you thought you needed.
If you’re honest, you didn’t have to work too hard to picture it (because you lived it last weekend). Let’s face it: We all want what we don’t have. And we want it because we think it will make life that much better.
But social media makes the comparison game even stronger these days. With Pinterest, your friend’s post about their brand-new couch with those perfect pillows and that popular blogger’s sponsored posts about that incredible, all-inclusive resort . . . where does it end?
Newsflash: It won’t. All of these things just drain your budget, steal from those future financial goals you have . . . and steal your joy.
2. Not Tracking Your Spending
It doesn’t matter how large (or small) your income is—if you’re not tracking your spending, you’ll never be in control of your money. In fact, you’ll always feel like your money owns you.
Listen: Living paycheck to paycheck is the pits. If you’re wondering where all your hard-earned money went each month, it’s time to start tracking it! Stick with us, and we’ll show you how.
3. Shopping to Feel Better
Some people like to joke about being a shopaholic, but compulsive spending, otherwise known as retail therapy, is a thing. For most of us, spending on impulse just because we want it now is the problem. We see something and buy it before we think about what’s in the checking account (or about our financial goals, for that matter).
4. Paying With Plastic
If you haven’t noticed, you spend more when paying with plastic. Whether that’s a credit card (everyone loves shopping with someone else’s money) or a debit card, the research is the same.1When you spend with cash, you feel it. You feel those crisp (or wadded up) green bills leave your hand, and it hurts. Something inside of you cringes. Just moments before, you had money, and now, you don’t.
Think about it, when you’re shopping with plastic, it’s easy to spend more, because you don’t physically see the money right in front of you. So, the next time you make a purchase, pay in cash, and you’ll see exactly what we mean. Plus, there’s no overspending—you can only spend what you have with you.
Here’s the good news: You can overcome these overspending habits with a little planning, self-discipline and long-term thinking. Here’s how we suggest you stop spending money.
8 Ways to Stop Spending Money
1. Know What You’re Spending Money On
Making and sticking to a budget every single month is what is going to help you get out of debt and stay out of debt.
If this is your first time budgeting, you might be surprised by how much money you’re spending each week or even each month on little things, like coffee, lunches or that snack shop at work that your spouse doesn’t know about.
When you make your first budget, you need to make sure your basic needs (or your Four Walls) are covered. These are:
While these are the necessities, they can also offer an opportunity to cut back on the extras. You really don’t need to go out to dinner every night or buy new clothes every week. And if you are, it’s time to invite Marie Kondo into your life.
2. Make Your Budget Work for You
Now, you’re ready to create a monthly spending plan for everything from gas to going out to eat. This is also called a zero-based budget. This means your income minus your expenses needs to equal zero and you’ve told every single hard-earned dollar where to go. Just remember, it’s a working budget. You have to keep coming back to it in order to stay on track.
If this is your first budget, you’ll want to give yourself grace. It takes a few months to make your budget work for you. But if you’re an expert, take another look through your monthly expenses for other ways to trim your spending.
Do you really need to spend money on clothes every single week? Probably not. What about that gym membership you haven’t used in eight months? It’s time to get really honest with yourself and start trimming the fat out of your budget. Answering these questions can help put you on the path to spending your money with intentionality.
For anyone in the SPS Family who enrolls in SmartDollar, you have FREE access to EveryDollar, a simple yet powerful budgeting app, tht you can use to create your first budget in 10 minutes. You’ll be able to plan your budget, track your spending, and monitor your debt and savings progress each month.
3. Shop With a Goal in Mind
We’ve all been there. You’re out of shampoo and toothpaste. So, with those two items in mind, you make a quick run to Target. But as soon as you walk through the door, you feel the gravitational pull toward the dollar spot and fill your basket with a bunch of those colorful cell phone chargers and water toys for the kids that you swear will get used all the time.
After a few impulse buys, a quick trip to the store for a few essentials just got . . . expensive, thanks to a few seemingly harmless purchases.
But does anyone really plan on getting sidetracked while they’re out shopping for essentials? Probably not. But if you often get caught in this scenario, you might want to make a point to avoid the stores that trigger overspending.
4. Stop Spending Money at Restaurants
Changing how you spend money on food is one of the easiest ways to save money. And we all know that going out to eat gets expensive fast. If you’re spending $15 on lunch four times a week, that’s $60 a week—and $240 a month! Imagine how quickly you could pay off debt with that kind of money!
Consider this: Instead of heading into the grocery store and wandering up and down the aisles, create your meal plan for the week, make a list before you go, and then stick to it. If you need to leave the kids (or your spouse) at home to save even more, don’t think twice about it. Planning your meals in advance means lowering your overall food costs.
Speaking of lunch, bring your lunch to work every day. We promise—it doesn’t have to be complicated! Set aside some time on Sunday afternoons to meal prep, or take 15 minutes each night to make a sandwich or pack up some leftovers for the next day.
We’re not saying you shouldn’t ever treat yourself to a nice dinner on a special occasion or Sunday morning brunch—just make sure it’s in the budget.
5. Resist Sales
Who doesn’t love a good deal? Retailers know their customers, and they also know the irresistible pull of a flashy (and perfectly placed) sales rack. But how much is all this saving really costing you?
If you buy a sweater you never intended to buy just because it’s 25% off, you’re paying 75% more than you would have. Sorry, shoppers, that’s still called spending, not saving.
Avoid these shopping traps by making a list before you go! Then, practice some self-discipline once you’re there. If you see an item on sale that isn’t on your list, it wasn’t meant to be.
6. Swear Off Debt
If you’re serious about getting your overspending under control, you have to swear off debt—for good. After all, debt steals from your income. Not only that, you’re stuck paying on the loan or credit card (plus interest) until it’s gone for good. It’s true: Your debt owns you until you pay it off once and for all.
We live in a world where just about anything can be financed or borrowed, which can give you a sense of financial security. But that financial security isn’t real. It makes you think if you can afford the payment, you can afford the new car, house, or big purchase. But in reality, if you don’t have the cash to pay for something right now, you can’t really afford it.
So, go ahead. Make the decision to cancel your credit cards, and commit to living debt-free from this moment forward. And just as a refresher: Credit is an enabler. It enables you to overspend. But without it, overspending isn’t an option.
7. Delay Gratification
If you’re having trouble sticking to your new budget and shopping list, imagine how you’ll be using that must-have item a month from now.
Will that sweater still look good after a few washes? Will your kids still be playing with that overpriced toy set? Will those cheap shoes last through the season?
The majority of the time, the answer is: Put it back. But what if you still want it? Then, you wait. Work it into next month’s budget and revisit your feelings in 30 days. If you still love it, you’ll be able to buy it without the guilt, because it’s already in the budget.
8. Challenge Yourself to Reach Your New Goals
Put your willpower to the test by buying just the bare necessities for one month. You’ll be amazed by how little you actually need.
You’ll also be able to identify the things you don’t necessarily need, but simply like to have. Do you like using your gym membership because it helps you stay active? Keep it. Does your weekly visit to the chiropractor keep your back in tip-top shape? Keep going. If it fits into your budget (and doesn’t cause you to go into debt), you can spend money on it.
The key to stop your overspending is creating better money habits and being intentional with what you spend your money on. Use SmartDollar to learn those good money habits and don’t step into a store again without a budget and a plan! That plan can be right at your fingertips with EveryDollar. Again, it’s a free app for anyone in the SPS Family that’s enrolled in SmartDollar that makes it easy to create (and stick to) your budget.
This article originally appeared in the Dave Ramsey Newsletter.