7 Tricks to Kick the Overspending Habit for Good (and Still Enjoy Life)
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We’re all guilty of it from time to time.
Even with the best laid plans, it’s inevitable that we’ll go over budget now and then.
But what happens when it’s not just a little thing here and there? (Those are almost unavoidable). What happens if it becomes a serious problem and consistently puts you over your budget?
Compulsive spending habits can cause serious strain on your finances and your relationships with others. The good news is, there is a way to overcome it if you put some effort into it. And, contrary to popular belief, you can still enjoy life even if you’re not spending more money than you have.
Let’s learn some ways on how to avoid overspending.
1. Set Up Your Budget
Rule number one with anything related to money will always and forever be to set and live by a budget.
Overspending is after all, another word for over budget.
Budgets are not meant to restrict you, in fact a budget does the opposite. It frees you from stress to know you can buy a new outfit, go out to dinner or buy a new tool for the garage without it affecting your ability to pay the electric bill.
You just have to plan it that way.
A budget gives you permission in advance on how you will spend or save your money. You’ll have a clear picture of everything you owe and what you have left to have a little fun with.
The caveat is to make sure your splurge spending does not interfere with most important things in your budget.
It’s important to prioritize, but in the end, give yourself a little wiggle room, such as a small allowance to spend on whatever you want or plan for nights you are going to eat out.
2. Identify Your Spending Triggers
In many cases, overspending is caused by force of habit. Here are just a few causes of overspending that you might relate to.
- Do you frequently visit the grocery store when you’re hungry?
- Do you bring your kids with you and offer a bribe for good behavior?
- Do you shop when you are stressed or upset?
- Do you buy things to please others?
- Do you buy things out of convenience? (i.e. easier than fixing dinner, you travel frequently, etc.)
- Are you addicted to a great deal and can’t resist sales?
- Do you have a credit card addiction?
- Are you jealous of that new thing the neighbors just got?
Think through the times you’ve been caught overspending and what might trigger your urge to buy. If you’re not sure, start paying attention and tracking what the cause is. Create a log that you can jot down notes of what happened every time you overspend. You might find multiple causes.
Once you can identify why you’re over spending, you can work on a plan to substitute your spending habit with something else.
For example, can’t avoid shopping at times when you’re hungry? Pack a snack in your purse or car so you can curb your appetite a bit while you’re in the store. Trying to buy affection by bribing your kids for good behavior or giving gifts to others? Find something else to give that doesn’t cost anything like affection or your time.
3. Step Away from the Credit Cards
Everyone loves a great sale, and if you’re an over spender, a sale probably puts you over the top on the “can’t resist” meter.
A credit card puts a reverse spin on the sale. Let’s say you’re walking by your favorite thingamajig and the tag now reads “Overpriced by 18%!”
Not so appealing anymore is it. You can slap a “meh” emoji on that one.
Now let’s add insult to injury.
(Yes, I’m doing this on purpose to squash the impulse to overspend using a credit card.)
When you make payments each month on that thingamajig, you continue to pay interest and could end up paying a lot more than 18% extra.
So the next time you walk by an amazing deal and are considering a credit card, rewire your brain to think “Woohoo! I get to pay 156% for this item … uh, wait, never mind.”
When a store asks you to use (or sign up for) their store credit card, that’s exactly what they are asking you to pay. They know they’ll likely make a lot more money if you put it on credit.
Not such a good deal after all.
What to do instead
Set aside money a little fun money in your budget. You might need to save for a few months, but you’ll then when something jumps in your cart you don’t have to worry where the money will come from to pay for it.
4. Skip Payment Plans
We’ve just talked about avoiding credit cards because you end up over paying, but now you need to rethink payment plans.
In sales there’s a marketing trick called “reduce to the ridiculous.” The idea is to reduce the price to the lowest possible amount so that it makes it easier to buy.
Let’s say we need something a little expensive, like a new mattress.
We’ve been trained by the marketing department to think in terms of payments rather than the full price.
“It’s not $1,200. It’s only 24 easy payments of $59.” (Which adds up to $1,464 + interest)
If you extend payments out a few years, the payment drops even more and makes it irresistible to buy.
The problem is we get sucked into a black hole of never ending payment plans. Before you know it, a bulk of your paycheck is being used to pay payments.
No wonder you’re having a hard time with your budget! Everyone else is taking your money. (Or what used to be your money.)
What to do instead
Start a sinking fund!
Think of a few things that you know you’ll need to save up for. Decide how long you have to save up and divide the price of the item by the number of paychecks you have remaining until you need to buy.
For example, your new mattress is $1,200. (It's a smokin' hot, awesome mattress.) If you gave yourself a year to save up and get paid every other week, you could save $46/paycheck and have enough to buy the mattress in one year.
Save this amount from your paycheck so that you’ll have the money when the time comes to make a purchase.
Related Article: How to Pay Cash for Big Expenses (and Quit Relying on Credit Cards)
5. Put a Time Value on It
Another trick is to think of how long you’ll have to work to pay for what you’re about to buy.
Going out to eat? Let’s say you ring up a $50 tab. How many hours do you have to work to cover the cost of the $50 dinner?
I’m not saying you can’t go out to eat, but if you frequently eat out you might be surprised how many hours you had to work to pay for one meal (or two for your date). Maybe you'll think twice and decide your money better suites you elsewhere than one dinner.
Putting time value on it may also help you appreciate what you do have a little more. You recognize the hard work you’ve put in to get what you already have. It can help you to have a bigger sense of gratitude.
6. Unsubscribe from Store Email Lists
I have a love-hate relationship with email lists.
Hate because my inbox is stuffed full with more emails than you could ever read, but I LOVE knowing when there are sales so I know the best time to buy.
If sales are your weakness, you may want to cut yourself off from email lists.
Sales happen All. The. Time.
You won’t miss anything by opting out and not being aware of every single sale. You can follow up with the store around the time that you do need to buy something and see what’s on sale then. If you don’t need the thingamajig right now, don’t worry, it’ll be on sale again soon.
If you rely on sales and can keep your habit in check, another option is to automatically forward the store sales to its own folder inside your email account. Then only check the sales when you need to.
7. Use Cash
If your overspending tends to occur with impulse buys as you’re wandering around the store, try carrying your budget in cash, and only take the cash you need with you.
I use a debit card (not credit) for plenty of things, but my rule of thumb is if I’m going into a retail store or shop (including grocery stores, department stores, salons, restaurants, etc.) then I will pay with cash.
This forces me to pay attention to what I’m buying so I don’t have to put something back.
Check out this cheap printable for using the cash envelope system.
They always say, “good things come to those who wait.” In this case, it’s true. Be patient with your wants and be willing to save up to pay for things.
What are some things you have tried to curb your overspending appetite? Share your ideas with us.
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