Do you have a spending problem? Would you know if you did?
If you’re stressed about your finances or don’t know where your money goes, it’s likely you could have a spending problem and not even know it. Read on for ways you can identify and stop overspending.
Signs You’re Overspending
1. You Don’t Know Where Your Money Is Going
Do you ever ask yourself where your money went? You know you just got paid but you don’t remember spending it all already.
If this is you, you may have a spending problem.
2. You Stress About or Can’t Pay Your Bills
Feeling stressed or helpless about your finances when bills come due can be a sign of overspending.
If you don’t know at any given moment whether you can pay off your credit card, then you may have a spending issue.
3. You Overdraft Your Checking or Your Credit Cards Get Declined
Trying to spend money you don’t have is pretty much the definition of overspending.
Maxed out credit cards and empty bank accounts mean you’re spending beyond your means.
4. You Can Only Cover Your Minimum Payment
If paying the minimum on certain credit cards is part of your debt pay-down strategy, then you’re probably ok.
But if you’re only paying the minimums because that’s all you can spare, you’ve likely got a spending problem.
5. You Can’t Balance Your Budget
First, if you have a budget, good for you. But if you can’t make it balance, you’re doing it wrong.
Your budget should be a reflection of your plans for the money you have, not money you hope or expect to get.
6. You’re Living on the Credit Card Float
You may think you’re doing just fine since you can pay your credit card bill each month.
But can you pay it in full at any time?
If you check and see that you’ll be able to cover it once you get paid again, you’re riding the credit card float and spending money you don’t have yet.
7. You Think of Habits as Splurges
If you splurge on Starbucks daily, I hate to break it to you, but that’s not a splurge, that’s a habit.
A splurge is a once in a while thing.
Labeling a habit as a splurge can be a sign you have a spending problem and don’t even realize it.
8. You Aren’t Worried About Debt Because Everyone Has It
If you think debt is the norm and has simply become a way of life for you, you may or may not have a spending problem, but you definitely have a mindset problem.
Don’t let perceived cultural norms influence your future by keeping you broke and stressed out.
How to Stop Overspending
If any of the above descriptions resonate with you and you want to stop overspending, here are some tactics to help.
1. Know Why You Overspend
It’s a good idea to evaluate why you’re spending in the first place.
Are you spending because of peer pressure – you can’t hang out with your friends unless you eat/drink with them too.
Maybe your trigger is boredom or stems from some other emotional need.
The biggest two reasons I tend to come up against are YOLO and FOMO: the “you only live once” mindset and the “fear of missing out.”
Recognizing what triggers your spending can help you stop it.
2. Set Some Goals
Setting financial goals will help you determine your priorities.
Once you have a goal in place, it’s easier to say no to things that will distract you from it.
Setting goals will help you stay focused and keep your spending in line with your priorities.
3. Make a Budget
If you have a spending problem, budgeting is probably the last thing you want to do.
It can feel stifling and restrictive.
But if you pair a budget with your goals it’s really just a roadmap to help you get where you want to be.
By giving every dollar a job, you’re taking control and telling your money what you want it to do.
4. Track Your Spending
Do you remember that feeling of not knowing where your money went?
Well, tracking your spending is not only the best way to find out but also helps you fine-tune your priorities and start spending accordingly.
5. Try a Cash Diet
If the temptation to spend is greater than you can manage, switch to cash only.
Take out however much money you want to spend, split it up across different categorized envelopes, and go spend it.
Just remember, once it’s gone, it’s gone until you get paid again and can replenish those envelopes.
6. Avoid Temptation
Do you find yourself excitedly clicking the newest sales email from your favorite brand when it hits your inbox?
If so, scroll a little further down and click that “unsubscribe” button instead.
Remove the temptation altogether by eliminating it from your inbox. Out of sight, out of mind.
You may miss a sale, but there are plenty of ways to find deals when you’re actually in the market for something.
7. Unfollow the Joneses
Social media has its benefits, but it also tends to breed an attitude of envy and desire.
If you can’t resist swiping up on your favorite Instagrammer’s posts, tap the unfollow button instead.
8. Forget Your Credit Cards
Do you store your credit card info in your phone or browser to make checking out easier?
Go into your settings and delete them.
Make the act of purchasing as painful as possible for yourself.
Along those lines, take your cards out of your wallet as well.
You can’t spend on what you don’t have.
9. Try a Money Challenge
Turn your goal into a game by taking on some money challenges.
Doing a no-spend challenge can be a great way to break the overspending habit.
Gameifying the process helps to keep you motivated and on track.
10. Give Yourself Some Fun Money
Spending habits are tough to break, especially with an all or nothing attitude.
Budgeting yourself some fun money to use for whatever you want can help you resist the urge to give up when things feel too restrictive.
11. Swap Expensive Habits for Cheap Ones
You may identify with the things you buy, making it that much tougher to stop.
Whether it’s clothes, books, throw pillows, or something else, we all have things we buy that reinforce our ideas of ourselves.
Instead of trying to change your identity, simply change where you find the things you love.
12. Use Visual Aids to Remind You of Your Goals (and Progress)
Changing your habits and seeing the impact of your efforts over time can be difficult.
Using a visual reminder helps keep you focused and motivated.
For tracking your financial goals, I highly recommend Debt Free Charts for some fun designs.
13. Just Say No to Debt
It sounds simple, but depending on your financial upbringing and history it may be anything but.
Resolve to yourself that you simply will not accept new debt.
If it’s not an option, it won’t be a problem.
14. Replace Bad Habits With Good Ones
Bad habits can be harmful to your health and your wallet. Examine yourself and look for any bad habits you can drop or good habits you can adopt.
Read and follow James Clear for some tips on breaking bad habits and establishing good ones.
15. Set Spending Rules
Putting some rules in place for yourself can help you ease the urge to overspend.
Try forcing yourself to wait 24 hours before making a purchase. Or start to separate your wants and needs by wish-listing your wants and adding your needs to cart.
Stack them and you’ll have your spending in check in no time.
16. Create Separate Checking Accounts for Your Bills and Discretionary Money
If your spending puts you at risk for missing payments, create a separate account you use only for bill pay.
Keeping your spending money separate will prevent you from accidentally using the money you had earmarked for bills.
Take it a step further and automate your bill pay to ensure you never miss a payment again.
17. Automate Your Savings
Start automatically deducting money from your paycheck to put toward sinking funds and your emergency fund.
This will help you avoid overspending on bigger, unexpected expenses like car repairs and Christmas.
Take Control of Your Spending Once and For All
It’s not easy to break the habit of overspending. Especially if you aren’t aware you’re doing it.
Becoming intentional with your spending is the key to finally taking control of your money once and for all.