How to Stop Overspending: 10 Tips to Stay on Track

By SDCCU , 01.11.2019 Financial Education
How to Stop Overspending: 10 Tips to Stay on Track
Creating a budget is nice in theory but hard to keep when temptation is everywhere. According to Money Magazine, “people’s peak earning years also appear to be their peak debt years.” It is important that we focus on what makes us happy and how we can reach our goals. Aligning goals with spending is the key to staying within budget. Follow these tips to resist the temptation of overspending and stay on the right track to financial freedom.

  1. Have a financial plan. The easiest way to stop yourself from purchasing something you didn’t plan is to make a list. Knowing exactly what you need and how much you want to spend is a sure way to stop you from indulging. Another good idea is to set a time limit. The longer you have to wander, the more opportunity to tempt you.

  2. Don’t spend & shop for entertainment. If you read our blogs then you might have seen this one before. Shopping for fun is a sure way to end up spending money you did not plan on. Try going to the beach or on a walk, where temptation can’t find you.

  3. Round up price tags, not down. Do you wonder why so many prices end in .99? It’s because we will hold onto the left digit before rounding a number. For instance 2.99 is often seen as 2 dollars versus 3. Research confirms that we’re disproportionately influenced by the left number and perceive a penny savings to be larger than it is.

  4. Buy your products in bulk. Buying in bulk is only valuable if you actually need a large amount. For instance, buying bulk non-perishables is often a great choice because it will never go bad and you use it daily. Yet, buying bulk fruit might not be a good idea if it goes bad before you can use it or you don’t love mangos that much.

  5. Small purchases add up. Beware of checkout line purchases. A magazine here or pack of gum there can add up. If you can’t live without it and regularly pick it up on your way out, look for a pack in the store isles or online. Small purchases can add up over time. Try to be mindful of your spending and prepare beforehand so you are not tempted when the time comes. Don’t get defeated if you slip up, budgets are all about tweaking to meet your goals as well as your actual habits. You may miscalculate or have an emergency that will throw you off. As long as you keep an open mind, you will find a budget that fits exactly to you.

  6. Sleep on your purchasing decision. If you are out and see an item you really like, wait a day or two. Often your mindset will change and you may realize that you no longer have the urge to buy that item anymore. If the item is worth it, you will feel better about evaluating your purchase then just grabbing it in the moment.

  7. Carry bigger bills. Having large bills such as $100 makes you not want to break it on smaller purchases that are not vital such as a $2 candy bar. These small purchases will add up in the long run, avoiding them can help you save more than you think.

  8. Know the sales pitch. It can be so tempting to make a splurge when you get an email that your favorite brand is having a sale. Keep these emails out of sight and out of mind. When you have saved enough for a shopping spree, check your email for discounts. Also avoid buying any products you see an influencer use until you have researched the product yourself. In fact, avoid YouTube “hauls” all together. This only shows us things we want to buy without even going to the store.

  9. Return it. Did you buy something out of impulse and now you are regretting it? Return it and don’t live with an item you don’t want. Many stores will give you a refund back to your original form of purchase or a gift card. Many stores are even becoming more lenient on their return policies to make the customer happy and loyal. We all feel the urge to splurge but you always have options, even if you do give in occasionally. If you held on to it too long to return it, try selling it online. There is no reason to let the guilt get you down. Keeping that item around only reminds you of the negative. Let that worry, along with the item, go.

  10. Challenge your spending habits. Sometimes the best way to stop overspending is changing your habits. Some go for a full month or year without spending on luxuries but this can sometimes backfire with a huge spending spree. We recommend trying to challenge your spending in areas that won’t throw you completely out of whack. Whether it be going out to eat one day less every week or choosing not to buy any products until you have completely used up the one you currently have. Another idea is to eliminate one problem area for the month, the most common is not spending money on clothing for one month. This method is not meant to deprive you of things you love but to show you that you can overcome challenges. It may even make you want to set up new challenges every month until you find something that actually helps you save and that you can stick to.
When you spend with intention, you are more mindful of purchases and derive more joy and value from the purchases you make. These money saving methods to help you stop overspending are just the tip of the iceberg when it comes to saving and your budget.

Visit our Financial Knowledge Blog to learn more tips on setting up a solid financial future or join us for Financial Wellness Wednesdays.


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