Did you know that according to a study by U.S. Bank only 41% of Americans have a budget? Or that the average American has over $137,000 in debt? And all this, while the average American household income sits around $59,000 a year.
I don’t know about you, but I find those numbers scary. What those numbers suggest is that most of us clearly live way beyond our means.
It seems like we have slowly lost our way, and become victims of the spending trap. This is cycle that can feel impossible to break. Of course, there are small changes you can make in your every day life that could make a huge impact on your overspending.
How to Stop Spending Money and Stay on Budget
It is of utmost importance that all your spending is always accounted for. To do this, I strongly suggest you give yourself, and all others in your family, an allowance. This will be your blow/spending money. It is the money that you are free to spend on whatever you want, whether that is on takeout coffee, a new shirt, or books, that it’s entirely up to you.
What that amount means is that once is gone, is gone. No going a bit over the limit, or simply ignoring it altogether. Because you have a set limit, you will be smarter on how you spend it. And the best way to keep on top of this is by using cash.
As stated above, the use of cash is THE best way to stop overspending. When we use a card, even a bank card, it takes away the accountability that cash provides. Because we can’t really see the money leaving our hands, we can easily spend more than we should.
Leave your bank card at home
I know that this might be a bit scary, but leaving your bank card at home goes hand in hand with using cash. Because, what’s to stop us from just swiping the card just this one time? Nothing but ourselves, that’s what.
Lack of self control is one of, if not THE biggest cause of overspending, and that’s a trap we can fall into with ease. After all, old, bad habits are the hardest to break.
But if your bank card is at home, then you have no option but to use whatever cash you have on hand.
Cut up and cancel all credit cards
Our society has normalize the use of credit cards to the point that we feel like we must have an use them. But we don’t. We can easily turn a want into a need when we know we have that extra resource.
But here’s a news flash: credit cards are NOT a resource. They are a trap that keeps us buried in consumer debt. It’s probably only second to student loan debt. And because it’s become the norm, we feel like we need it.
We don’t. So, in order to avoid the temptation of using them, the best you can do is to cancel and cut them up. Some are super easy to cancel, and some you will find their customer service reps upselling you on a different debt option. Say no to all, and let them go.
Banking & bill paying
I’d say that this is the one thing that has helped me the most. For years, it was my husband who did all the bill paying, and online banking. Not because I couldn’t do it, but because I was lazy.
A few years ago, I decided to take charge of this. We would be late on a bill on occasion mainly because I took care of the mail, and opened the bills, but forgot to give them to my husband. This would stress him out a bit. And so I took over.
Oh boy, was that an eye opener! I was suddenly faced with the cold, hard facts of how the money got to our bank account (direct deposit), and how it left (bill payment). It made it so much more real! Since taking over all our banking, I have been more mindful of how we spend, and learned how to budget our money better.
This is one area where I still struggle a bit, but I’d say it’s a work in progress. My biggest temptation are thrift stores, and online shopping.
What I have found is the best way to avoid these, is to stay away. I love being home, and stay here most of the time, but when I go out, I try my hardest to not go by my favorite thrift stores. I just know I will find some amazing deal, and spend on something we don’t need. And so I try to stay away. I’m mostly successful, but as I said, it’s a work in progress.
As for online shopping, I do not do any transactions involving money on my phone, and that’s a plus. However, when I do make my purchases, I am on my laptop, which is always in front of me while I work. I have found that if I keep pages like Ebay or Amazon open, I am more tempted. Therefore, I keep them close, and stay busy otherwise.
If you are anything like me, your inbox is probably packed with all sorts of offers from loads of companies. For me, that madness started when I started couponing, and looking for any other way to save money. Sadly, it got out of control quickly. Suddenly, I was getting weekly (or more!) emails from sooo many companies! They all want your business, and will pitch anything to get you to spend.
By unsubscribing, you will hear nothing about those “great deals” that only lead you to overspend. I recommend you unsubscribe to all but maybe 1-2 of them. Or just unsubscribe to all of them. Trust me, almost (if not all) are for things that you truly don’t need.
Like every other difficult journey seems more manageable with others by your side. If you can find an accountability partner, you will have the support to avoid overspending.
Look at it this way: other difficult journeys have systems in place to help those traveling those paths. Take AA, for example. They call them sponsors, but they truly are accountability partners, and support. Same can be said about counselors, a church priest and even your elders.
The point is, find someone you can trust. Not only to keep you from overspending, but also to tell you the hard cold truth. This could be someone who is going thru the same, or who already has. The important part is that your accountability partner does not enable you, and is willing to take on the roll.
Engage in other activities
I have said before but I will say it again. Having a hobby has many benefits. Those benefits can range from emotional well being, to pass the time, to even become a small business.
Many people who overspend do so out of boredom, or as “therapy”. The problem with that so called therapy is that it leads to more problems than it solves, like clutter and debt.
And so, my advice to you is to find yourself a different way to pass the time, a way that does not involve filling your house with things, but that fulfills YOU. This could be anything from volunteering to doing crafts to reading. Really, the sky is the limit when it comes to finding ways to stay occupied, and avoid overspending.
Get a coffee maker
No one needs takeout coffee, for Pete’s sake. You can sell that crap to yourself all you want, but it is not a need. It amazes me how much money people are willing to spend to have someone else make their coffee. I think it has become more a symbol of something than anything else. But I could be wrong.
The point here is, that daily run to the coffee house is costing you a ton of money. Sure, $5-$6 here and there do not sound like much. But when you add it up, it is quite a bit. And completely avoidable.
Invest in a coffee maker that suits your needs. That could be anything from a simple one, one with a timer that you can set up to start brewing at a certain time, or even a Keurig, which offers a wider variety of brews.
Stay out of social media
This one might sound off, but social media is one of the biggest influences in our lives nowadays. Not only are we bombarded left and right by ads, and offers. We are also witnesses to everything and everyone.
Social media perse is not a problem. Various social media channels help us stay informed of world events, and up to date on important things. It also allows us to keep tabs on those we love because we get to see their pictures, and later life updates.
However, it is that almost unlimited access that can be an issue. No matter what anyone wants to believe, the majority of people tend to share their “perfect” lives for all to see. This could include, but is not limited to their cute new outfit, their latest vacation, or even what they had for dinner at that trendy new restaurant. The problem is, it could ignite a desire in us to spend money to “be” like them.
To minimize this effect, try unliking pages, and maybe even unfollowing people. This will help keep that added temptation at bay, if leaving social media altogether is not something you want to do.
How to Stop Spending Money and Stay on Budget
Dave Ramsey always says, and I quote: “We buy things we don’t need, with money we don’t have, to impress people we don’t like”. Nothing is truer than that.
So, in the spirit of keeping up with the “Jonases”, we often overspend. No one can make the decision to change this other than yourself. And the first step is to take a good look at your spending.
Once you have had that initial and shocking reality check, all it takes is your desire to change this, and the willingness to take action by following these habit changing tips.