How to Stop Yourself from Overspending
The most challenging part of reaching your financial goals is changing your behavior. You’ve become accustomed (maybe even addicted!) to spending in a certain way, and it’s hard to shift! And, at times, no amount of budgeting and head knowledge seems to fix the fact that you really like to hit “Order Now.”
So, you know the plan, but can’t stick to it. What do you do? You need guardrails. Guardrails on the road keep you on track and nudge you back in the right direction BEFORE you crash. You can do this with your finances too. Here’s how:
How to Stop Yourself from Overspending
Switch to cash.
Studies have shown that when people pay with cash, they spend less. WAY LESS. A study in 2016 showed the average cash transaction was $22 whereas the average card transaction was $112. So, you could spend over 400% more using card over cash.
This is because our debit cards give us easy access to money! If you have an envelope that has only $100 for your weekly groceries, and after you add up everything in your cart, you find it’s $20 over, you put $20 of items away. Why? Because the hassle of getting more cash acts as a guardrail. Each extra step you take to get more money makes you reconsider the purchase.
So, to change your behavior and set up a barrier between you and overspending, pay only with cash. Get an envelope wallet, and each time you get paid, pull out cash for each budget category. No more overspending!
I know what you’re thinking: But I can’t pay my electric bill with cash! But, let me ask you this: How often do you overspend on your electric bill and other autopay transactions? Yeah, never! Because no one wants to give the gas company or internet provider more money. No, it’s Target, Amazon, and Costco that are getting all of your hard-earned cash.
Remove your debit card from all websites.
Cash is great, but what about all those online purchases? If you’re like most Americans, you likely have your debit or credit card information saved to dozens of websites. This leaves NO guardrails between you and impulse buying.
It probably goes like this: You scroll on social media, see something you like, click on it, travel to the new website, decide you like the price, and buy it. Often, your budget never even pops into your head! Maybe you tell yourself you’ll work a little extra or cut a budget category somewhere else. But, neither of those things happen.
Then, you’re right back where you started—frustrated, ashamed, and still broke. To help combat this, go to every shopping website you frequent, and delete your card. Just get rid of it! The extra step of getting your card and typing it in will give your brain time to consider, “Is this actually a good idea?” More steps = better guardrails.
Get an accountability partner.
You also need an accountability partner to keep you on track and push you when things get hard. Each month or each week, sit down with them and review your budget. Just knowing someone will be checking your spending will help change your behavior to avoid the shame of admitting you overspent. You could even set up a system where they have to approve every transaction.
If you have to make a phone call to an accountability partner every time you make a purchase, you’ll start second guessing anything outside the budget. Who wants to call their best friend and ask for their debit information to buy another pair of shoes? Who wants to call their wife and ask if they can buy another thousand V-bucks? Yeah! You’ll probably talk yourself out of the transaction before you even make the call.
Find your why.
Why do you want to get out of debt? Is it to make a better life for your kids? Is it to afford fun vacations? Or, maybe it’s to free yourself of the stress of foreclosure and utility disconnections? Whatever it is, think of it, and write it down. Then, form it into a question that you ask yourself before EVERY purchase.
Is this purchase worth my child’s college education?
Would I rather buy this or lose my house?
Do you want this item or do you want family memories traveling abroad?
Would buying this be better than putting food on the table?
This sounds dramatic, but it works! The extremity makes the choice obvious. And, truly, these are the choices you are making. Enough careless Starbucks purchases or enough Amazon Prime orders will ruin these dreams for you, whether it’s $6 at a time or $100 a week. It adds up! Find your why, and remember it. (Even print it on a wristband like those old school WWJD bracelets if you need to.)
Fix the core reason for the overspending.
You overspend for a reason. You already want to be debt-free, and you already know the ins and outs of achieving financial freedom. Yet, you still fall back into these habits. That’s because there’s a bigger reason that you overspend that doesn’t have anything to do with logic and head knowledge.
People can develop shopping addictions or just overspending tendencies due to grief, poor stress management, and insecurity. Seeing a therapist can help you break down the psychology, work through the root issue, and hopefully see relief on the other side.
Unfollow and unsubscribe to social channels and email lists.
Are you tempted by emails about sales and new products from your favorite retailers? Or, do you see Facebook carousels or Instagram posts of items you just have to have? Unsubscribe to the email list and unfollow all those pages on social media. Reduce the visibility, so a sale comes or a new product releases and you never even know about it.
This is easier said than done, right? But, if you can surround yourself with content that keeps you focused on your financial goals, you’ll stay motivated to reach them. Listen to podcasts, read books, and even watch TV centered on finances and living debt free. This will keep you focused on your budget and goals.
Set super short-term financial goals and reward yourself.
If you impulse buy and overspend, long term goals probably seem too far away to care about. They always feel light years away, so why not just get what I want today? So, to help your brain change its way of thinking, set super short-term goals that’ll give you a sense of accomplishment regularly!
Maybe if you don’t buy coffee for a week, you treat yourself to a few hours dabbling in a favorite hobby. Or, maybe if there’s no Amazon purchases for a month, you go out for a nice meal. Or, if you save up $200 in a month, you cheat on your diet for a day. It could be plenty of things! Just ensure your rewards are financially responsible, of course.
Get a financial coach.
A financial coach will keep you accountable, give you valuable insights on your financial situation, and help you reach your financial goals. They’ll do this by creating a program and action plan based on you and your family alone! No one-size-fits-all template.
It’s like if you wanted to get fit, but just couldn’t motivate yourself to get to the gym. A personal trainer would make sure you showed up and worked hard. Plus, your fitness journey would be tailored to your situation and ambitions. A financial coach works exactly the same way! You can get a free consultation today to hear all about what they can really do for you and your track to financial peace.
If your habit of overspending is keeping you from achieving your financial goals, set up guardrails to get yourself back on track.
Changing your bad habits is no easy task. If you’re struggling to stay on budget due to an overspending problem or shopping addiction, don’t be ashamed. These things are really tough to work through, but with the right guardrails and a good financial coach, you can take real steps toward success. Soon, you’ll be forming good habits, staying on budget, hitting goals, and experiencing true financial peace. Take the first step by giving us a call today.