Are you spending too much money? Is your debt getting bigger and your bank balance getting smaller? It may be time for a change.
We have discussed debt relief programs a lot on this site and we’ve also discussed ways to save money on a budget, as well as this eye-opening infographic on overspending. But in this guide we’re going to focus specifically on overspending and show you how to stop spending money.
1. Keep Track of Every Cent you Spend
Let’s be honest, this is probably the first piece of advice you will find on every list about How to Stop Spending, and it’s also probably the first piece of advice given to you by debt relief and debt management experts.
It can be frustrating to be told the same thing again and again, but it’s often repeated because it really does work. Unfortunately it’s one of those pieces of advice that people often hear and ignore because they just don’t think it works.
But it does, and these days it is very easy. There are a number of apps out there that can do all of the work for you, connecting to web wallets, bank accounts and more. And if you’re worried about giving these apps access to your financial details then do it the old fashioned way and keep a written account on your computer or in a notebook.
2. Learn Your Over-Spending Triggers
Learn the emotional and environmental triggers that lead to overspending and make sure you don’t spend money during these periods. It may be that you overspend when you are feeling low, or during a specific time, in which case you need to avoid going shopping at that time.
Some of the most common triggers are spending impulsively during times of depression and under the influence of alcohol, and many also find that they end up spending more money on junk food and treats when they grocery shop while hungry.
3. Use Cash
There is a detachment to electronic money. It’s not tangible, it’s just numbers on a screen and that makes it easy to spend frivolously.
Try taking your weekly budget from the ATM and keeping it in your wallet. Keep your cards hidden, not only can they pile-up debt and leave you with large interest repayments, but they’ll also trick you into spending freely.
4. Use Your Job
Another good way to put your spending into perspective, whether you’re using cash or credit, is to base it on your hourly wage. Let’s say that you earn $20 an hour, you have $1,000 in your account and you’re considering spending $250.
It might feel like a reasonable expense. After all, it’s only a quarter of the money you have in the bank and when you spend it you’ll still have $750 left over. That’s the sort of thinking we use to convince ourselves to spend. In reality we should not be seeing it as a quarter of our expendable income, but as 12.5 hours work.
That’s nearly 2 days work, and you’re going to spend it in one go. Just like that.
Try thinking of every dollar in relation to how hard and how long you had to work to get it, as opposed to how it looks in your bank account or your wallet.
5. Set Goals
To motivate you to save more and spend less, you need to set goals. You can set short-term and long-term goals, as well as realistic and unrealistic goals—it’s good to have a mix.
These goals should all revolve around saving money. Tell yourself that you need to save X amount by X date and then set individual goals on how you’re going to achieve this.
The satisfaction of achieving a goal like this could be all you need to inspire you to set more and achieve more in the future.
6. Find Your Weaknesses and Make Sacrifices
If you’re in debt and struggling so much that you’re losing sleep and your quality of life is affected, then there are certain luxuries that you should not be allowing yourself.
Cut back on the drinking, the smoking, the drug use and the gambling—you can let loose when you’re rich, but right now you need to make sacrifices if you want to save money.
7. Make Sensible Purchases
There are budget versions of everything you buy, and in most cases they are just as good. In fact, many generic brand products are made using the same ingredients and often in the same factories as brand name stuff.
It’s an eye-opener when you realize just how addicted we are to brand names and just how much it costs us every year. So, stop splashing out on brands and start focusing on the actual products.
8. Give Every Cent Purpose
One of the biggest mistakes people make when they are struggling with debt is to allow themselves to have expendable income, money that they can spend frivolously. They do this because they consider the money “extra”, which is to say money that does not fit within their plans, does not need to be spent on specific things and maybe came unexpectedly.
If you set aside money to pay off debts every month and find yourself with $200 in your pocket and no more bills to pay then you might be more inclined to spend. So, on top of your bills and debt you need to include additional budgets, forcing you to set aside cash for savings, college funds, and whatever else you can think of.
Focus on the long-term and not the short-term and always create targets that go beyond the money you actually expect to earn that month. That way, you are forcing yourself to save more or work more in order to meet them, and if there is an unexpected windfall you will be less inclined to spend it on nothing.
How to Live Well Spending Less
You don’t need a lot of money to live well, and we’re not talking about cliches like “the best things in life are free” and “all you need is love”. Those phrases may work for sugar-coated pop classics, but in the real world you need some money to be happy, because without it life is a perpetual cycle of worrying about how the next bill is going to be paid and where your next meal is coming from.
What we mean is that there are ways you can get the maximum amount of enjoyment and satisfaction about of the minimum spend. It takes a little work and a little sacrifice, but it’s by no means difficult.
So, to learn how to stop spending money, take the above tips on board now and stop making excuses.