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For some reason, you realized you need to stop spending money the way you do because it is affecting your finances. In as much as trying to stop spending, money might not make sense on the surface because money is meant to be spent and that’s correct. It’s basically created for the exchange of goods and services, therefore saying you would stop spending sounds like a joke. But the problem is not that we spend money, but how we spend it or on what we spend it. Since you have realized you have one or two bad spending habits you need to do away with them. Hence, the need to stop spending money wrongly arises. You are on the right track and this post will show you practical ways to stop spending money.
What does it mean to overspend?
One of the major spending problems we have is overspending. And what does it really mean to overspend? To overspend simply means to spend without limits when you are not in a position (financially) to. When you overspend you spend without tracking how much you spend and end up spending above what you have (money) and what you can afford. This comes with a lot of consequences such as becoming short on cash as soon as you get paid or going into debt.
Is overspending a problem?
The fact that it is called “overspending” already makes it a problem. When you overdo a particular thing that you are not in the best position to it becomes a problem. When you live above your means and don’t manage your finances the right way. You are obviously making a bad financial decision that is keeping you from reaching financial freedom or stopping you from achieving simple goals like saving money.
So yes, in a nutshell, overspending is a problem. It slows down your financial journey directly and indirectly.
Signs of a spending problem
These are not all but a few indicators that you have a spending problem. Or to make it sound less harsh, these are signs you overspend money.
- You use your credit card a lot to shop. There is nothing wrong with using a credit card. However, it becomes a problem when you use it more than the cash you have or have earned.
- When you spend to impress or adopt a lifestyle you can’t maintain or afford at the moment. These could be seen in your choice of outfits, places you go to eat or the hobbies you adopt.
- If you struggle to pay the bills that shouldn’t be a problem to settle in the first place.
- Do you have purchases made recently or a few while back that you haven’t used? If, yes. Then you have a spending problem.
- When you make shopping a hobby. You are definitely over-spending
Using your emergency funds for emergencies is expected that’s what it is for after all. But when you begin to use your savings for basic needs you should be able to afford it without spending your savings or you completely find it hard to save money. That is a sure sign of overspending money.
Know what triggers you to spend
A trigger is simply something that makes you spend money. Like factors affecting your spending habits. And it could be a range of many things. Such as emotions, environment, and people.
Here are a few spending triggers you can relate to…
1. Always stop by your favourite fast-food restaurant or drive-through. Even when you are not hungry. I love snacking and if I am able to discipline myself and stop for a week and I always see myself with more cash. These types of spending triggers are physical triggers. As long as that store or drive-through is where you can access it then you are going to find yourself spending even when it’s not necessary.
2. When your emotions control your spending then you have an emotional spending trigger. Like with me the only emotion that makes me go over the board when spending money is happiness. Yours might be sadness, boredom, or anger. When you are bored and online you can see yourself going on an online shopping spree.
3. Social triggers are when your social lifestyle triggers you spend even when it could have been controlled. Some hobbies are expensive such as golfing and it can trigger you to overspend. Likewise some drinks after work with friends. You can end up staying longer, having way more drinks than you planned for, and sometimes even feeling the need to pay the bills for everyone.
4. If you love taking care of others or spending money on people, especially friends or family. This too is a spending trigger.
How to overcome your spending triggers
Knowing what triggers you to spend money is already one step in overcoming your spending triggers. Now that you have identified the triggers of why you often find yourself overspending. The next thing is working towards avoiding those things. Find ways to discipline yourself. This is why the next thing we will be looking at are the many ways to stop overspending and these tips will help with some of the spending triggers we have identified.
13 Ways to stop overspending
1. Go out with little money
Always make sure you go out with the amount of money that cannot fuel your spending triggers. Especially when your outing doesn’t require shopping or a pickup that money would be involved. Try to carry little money on you just so you avoid unplanned expenditures. This is one simple way to stop overspending.
2. Track your spending
Tracking how much you spend every day is very important as it helps solve a lot of financial problems. And to track your daily or weekly expenses simple means keeping a record of what you use your money for every day. Doing this is simple as long as you are ready to get your finances right. In this post, I wrote a step-by-step guide on how to track your spending and the importance of tracking your spending.
3. Make a list before shopping
There is a 100% chance you go overboard on your spending limits when you don’t make a shopping list. A shopping list is a guide and it is not designed only so you don’t forget an item but that you stay on track. If you are new to budgeting and have started reading content on how to create a budget then you must have come across the importance of making a list before you shop. This is definitely one easy way to stop spending money.
4. Save loose change
Saving loose change is an effective way to save money and at the same time help you to stop overspending. The thing about loose change is this, at the end of the day or after grocery shopping for instance you feel you have extra money or more money. You end up spending it on unnecessary things thinking you got more money while in the real sense you don’t. Save that change lying around and it will save you another day.
5. Spend cash
Credit cards are one of the major factors behind overspending because it gives you the go-ahead to spend the money you don’t have. Hence, if you want to stop spending money you should consider sticking to spending cash. It makes you conscious of how much you really have and what you can actually afford.
6. No credit card
Kiss credit cards goodbye if you really want to stop spending money. Even without having a spending problem credit cards give you more debts and literally takes you further away from achieving financial freedom. To be honest not using credit cards is one of the fastest ways to be financially stable. I know the system makes it look like a credit card is a lifesaver or a necessity but in the real sense, it is not. It is the opposite of what it appears to be.
7. No spend challenge
When it comes to money and our finances nothing is easy to do I was about to say a no-spend challenge is easy then I realized it is not easy. It means you become extremely mindful of your expenses and do things the way you usually won’t. It means saying no to your wants that over time have become needs. Doing a no-spend challenge is all about discipline it is not easy but achievable. Read this entire content for you to know what no-spend is all about and to try the one you can do.
8. Stop emotional spending
You know the advice that goes don’t make a decision when angry or when happy. The same goes for spending money. Good news might reach you and the next thing you want to do for the celebration is to spend some cash on things that will make you happy. In those moments of excitement please don’t just start spending money. Celebrate by doing something not related to money. Or when you are bored/sad and the only thing that comes to your mind that will lighten you up must make you spend money. Since we know these are all spending triggers always take a moment to think of another solution than spending money.
In simple words making a budget or budgeting is creating a plan for your income and expenses. Are you knowing a good estimate of your income and know exactly what you plan on spending it on. Budgeting helps you manage your money the right way and will definitely help you stop spending money. Budgeting is not a natural thing you just know how to do it. Hence, here is a budgeting guide for beginners.
10. Money goals
The thing about setting goals is that it makes you focused. And when you focus financially you become accountable for your money. Recently I joined a saving cooperative and since I am expected to have a certain amount of money to save at the end of the month. I have become extremely careful with my spending as I wouldn’t want to default. Plus I have a financial goal I hope to achieve within a period of time. So having financial goals is definitely a way to stop overspending money.
Not every premium membership or subscription is important especially when there is a less expensive substitute or you are struggling financially. The whole concept of not overspending money is to manage what you have and eventually grow it. Hence, while in the process of growing your wealth there are a lot of things you should consider cutting down or cutting off completely. I know Netflix and chill are cool and even important to some extent. However, you can think of many other family entertainments to cut down expenses in the area.
12. Cut down Social media
There is no day I am on social media that I don’t see a product I would love to buy and it’s a needed product. And God knows if I have that much money I will be spending a lot on social media.
These social media promotions are intentionally targeted toward you and I hope it makes sense to you. They know what people of certain ages in specific regions are interested in and make sure products to solve those needs always appear on your screen. Before, you know it the boredom that got you on social media is now making you spend the money you don’t have. All thanks to having a credit card.
13. See money as time
If you are paid hourly, then, money is definitely time for you. But we miss it when we don’t apply this to our spending habits. One way to identify a spending problem as stated from the beginning of this post and please read it if you’ve skipped it. Is having things you purchased lying around and you still haven’t used them. Starting from weeks to months.
The question is this, how do you feel seeing your 10 hours of work wasted without use. How would you excitedly spend a day’s income in a split second just to regret it later? That premium membership is probably 20 hours of work. I might be exaggerating it but have you considered this before? Well if you haven’t, it’s about time you start.
Finally on how to stop spending money
The fact that you have come to the realization that your spending habits are doing no good to your finances. Makes you a step closer to taking control of your life financially. All this change won’t happen overnight but definitely achievable within a short period of time as long as you are ready to be disciplined.
Since you are reading this I am sure you are ready to change your money habits and I am confident you can do it. You have the best tips listed for you and you can stop spending money soon.