Overspending, or under-earning, is a big challenge for many of us. Our eyes get a little big for our wallets, and we give in to impulse. Overspending is a habit like overeating. It’s the result of short-term thinking and not giving the longer term consequences full consideration. Spending money can also be like a drug. It’s a quick way to feel better.
Follow these eight tips to help kick your overspending habit:
- If it’s not in your budget, don’t buy it!
Of course, you already have a budget? Right? If not, make a budget and limit the amount you can spend. Ensure that you’re also saving consistently. If you have the urge to purchase something, whip out your budget and make a responsible decision.
- Short-term pleasure leads to long-term pain.
It’s practically a universal law. If it’s pleasurable in the short-term, you’re going to suffer in the long-term. The opposite is also true. A daily trip to the gym isn’t much fun in the moment, but the rewards are great. A $300 rhinestone unicorn might be satisfying today, but for most people it loses its lustre very quickly.
- Wait a while before making a decision.
Like other habits, overspending lacks thought. It’s automatic. You’ve learned to receive pleasure by giving in to the impulse to spend. Stop for a moment and disengage your mind from the path that it’s on. Spend 30 minutes doing something else and see if you still want to buy that frill. You’ll soon come to realize that you really don’t need that frill.
Some experts recommend causing yourself a little bit of pain when you’re about to overspend. Snap yourself on the wrist with a rubber-band or give yourself a pinch. It will change your state and bring you out of your buying trance. You’ll also learn to associate pain with unnecessary buying.
- What is your overspending really costing you?
Your credit card may be okay with the expenditure today, but what happens at the end of the month when the bill comes due? Too much debt can make it impossible to get a mortgage or a car loan. You may not be able to take a vacation. There may come a point that you can’t purchase the things you need to live. You might also get stuck working into your 70’s. Before you buy, consider the full consequences of overspending.
- Avoid opportunities to overspend.
If you are having a hard time stopping your overspending, then try to avoid opportunities to do so. When are you most likely to overspend? Is it while visiting your favourite store or website? Just stay away. Take another route that doesn’t pass the store. Delete the site from your browser. Avoid the temptation altogether. Make a list of your favourite spending venues and remind yourself of the consequences.
- Make note of how you feel before and after a purchase.
Do you spend when you’re feeling out of sorts? What emotions trigger the urge to buy something? How do you feel afterwards?
Before making a purchase, ask yourself if you need the item or if you’re just purchasing something to make yourself feel better. If you’re just trying to make yourself feel better, don’t buy it! Find another, more beneficial way to feel better.
- Feel gratitude.
Ask yourself what you’re grateful for before overspending. Studies have shown that feelings of gratitude increase willpower leading to reduced spending. Gratitude can increase resistance to instant gratification. Give it a try.
Also note that stress and anxiety lower willpower significantly.
- Track every cent you spend.
Many times we are not even aware of our spending. At the end of each day, review how much you’ve spent and record it. Keep a running total. Be honest. Be sure to include everything, no matter how small. You’ve spent a fortune on small items over your lifetime. Track it all.
Plan how to do better tomorrow.
Avoid spending money on things you don’t need. Overspending is a dangerous financial habit that can poison relationships and destroy lives. Keep in mind that replacing your savings always takes longer than you think it will. Relying on debt is even worse.
Overspending is the fastest way to destroy your finances, but it is a habit that you can overcome with a little effort. If you currently overspend, give solving this issue the time and effort it deserves.
Check out my other articles for more help on this topic.
Do you have any ideas that you have found worked for you, please share with other readers in a comment below.
As always, I am not a qualified financial advisor. I just relate financial management to my own experience which may not resemble yours at all. Advice is frequently worth exactly what you paid for it. Most of mine came from expensive experiences.