BasicsBudgeting "How Tos"Savings&Banking

How to Stop Spending So Much Money (8 Pro Tips)

In the consumer-driven world we live in today, it’s easy to fall into bad spending habits. These habits make spending seem effortless, as if it’s an impulsive act that we have little control over. What’s worse — they prevent us from being able to save money and prepare for our future. 

If that’s the case, don’t worry, you’re not alone.

If this sounds like you, and you’re looking for financial freedom, keep reading. We cover numerous practical ways to reduce your bad spending habits, allowing you to meet your financial goals.

Get Rid of Credit Cards

This one isn’t as easy as it seems, of course, but in the long run you’ll be better for it. Credit cards are highly convenient pieces of plastic linked to debt. They aren’t linked to money that you have, like a debit card is. As such, they can be even more tempting to use. Here’s the thing — if used wisely, credit cards can be beneficial. However, if you are in a position where you are compulsively spending money and have little self control, it may be time to part ways with them (at least for now).

The prospect of being able to pay back what you owe at a later date can be dangled in front of you like a carrot in front of a horse. This is a trap, of course.

Credit card companies want you to use their cards. After all, that’s their entire business model.

Depending on your level of discipline, you may be able just to hide the cards away, no harm done. However, if you can’t trust yourself or your bad spending habits, you may have to take more serious action. It never hurts to take a set of scissors to your credit cards if you’re afraid that you’ll keep using them. If you want to stop spending money, stop using credit cards and get them paid off as soon as possible.

Set Financial Goals

Financial goals can be savings goals or debt-relief goals. Regardless of which you choose, set one and stick to it. The best way to curb your bad spending habits is by knowing where you want to be, and what it’ll take to get there. 

If you have debt, then it should be obvious which goal to set first. You can’t start saving money until you stop owing money. Sort the debt first.

If you’re setting the financial goal to pay off your debts, understand precisely how much you owe, and what it may amount to if it goes unpaid. Watching a debt grow can be one of the biggest shockers, and it is what sets many people on their journey to financial freedom in the first place.

Should saving money be your goal, set a realistic monthly and yearly goal. To save money, you’ll need to know how much you can afford to save, too. Then, every time you want to make an impulse buy, rather than doing so, set that money aside for your savings account. You’ll be surprised how much you don’t spend, and how much you’ll end up saving.

Budget Accordingly

Knowing how much you spend each month in different areas of your life can do wonders for your spending habits. Break down your monthly budget into necessities like housing, utilities, food, and transportation for starters. See exactly how much money you need to spend each month. Then, look at all of the money you’ve spent that was unnecessary. Looking back at how you spend money should influence your budget action plan.

This is another area where credit cards come into play. Remember that credit cards are money that doesn’t exist. Therefore, if you’re spending money using credit cards each month, you may be spending more than you actually earn. You can’t save money and break bad spending habits if you indulge in more than you make each month. A budget can inform you of what you need to spend, and can tell you how much excess you can put away.

Dine In

Some of the biggest hurdles to lousy spending habits come from our eating habits, believe it or not. The temptation to go out for meals or order in, as opposed to making a trip to the grocery store can be incredibly detrimental. To eat a nice dinner, you’ll be paying an arm and a leg these days. If you go with fast food, you’re spending money that you could have spent on food that’s better for you, too. Financial freedom is the goal, and eating out is a way to miss the mark every time.

If you want to stop spending money on food, you’ll need to prepare your meals at home rather than purchasing them elsewhere. 

This goes for the food you are buying at the grocery store, too. Sure, prepackaged frozen meals are convenient, but you’re paying a premium since they’re already prepared for you. Often, you’ll be compromising on quality, as well. If you want to stop spending money, spend money on good groceries that will last.

Make a meal plan. It’s not as hard as you may think. Planning meals is often a fun task, and comes with an aspect of puzzle-solving. Choose your staple foods, like chicken and rice. Then, plan your meals around them! Try to incorporate both ingredients into as many dishes as you can. A good meal plan can escape the monotony that you see online, and still taste rather good. It’s just about picking the right ingredients.

Get Rid of the Temptation

If we look at financial freedom as a road, then you can theorize that billboards exist. These billboards are advertisements, and they come at you from all angles. Your phone or your tablet is probably like Times Square, when you think about it! Removing those ads can be a great way to improve your money habits.

Signing up for email lists is something that most people do, whether they realize they’re doing it or not. These email campaigns are a form of direct advertising, and their only goal is to get you to spend your money. If you find yourself subject to plenty of marketing emails, you can normally unsubscribe from them with the click of a button. You’ll need to do it as they come in, though; otherwise you’ll never remember. 

You’ll swipe it to silence the notification, then stumble across the email later on. 

If you want to spend less, get rid of advertising emails.

While it’s less likely than receiving emails, physical catalogues are still a method of getting you to spend your money, too. If you’re receiving catalogues you don’t remember signing up for, call the producer of the catalogue and stop the subscription.

Assume a Do-It-Yourself Lifestyle

How many services do you pay for out of convenience? It’s important to remember that time is money, but realistically, if you’re paying for a service that you can do yourself, you’re just losing money. The person you’re paying? Well, you’re giving them the financial freedom that you don’t have yourself, most likely.

If you pay someone to cut your grass, weed your landscaping, clean your house, or any other manual labour that you don’t feel like doing, you’re spending money that you don’t have to. By assuming a DIY lifestyle for reasonable tasks and services, you can stop spending money sooner than later. Stop spending money and start doing things for yourself.

What if you don’t have the necessary equipment, like a lawnmower? You have two options. The first would be to purchase one. Yes, that’s spending money, but it should be considered an investment. Find something second hand but of high quality, and you’ll be set. The second option is to borrow one. Too often do people lack the courage to ask to borrow an item like a lawnmower or a weedeater. If you don’t own one, ask a neighbour to borrow theirs. If you want, offer something in return! Just remember to return it as good, if not better, than the condition you borrowed it in. Making a relationship like that can help you to stop spending for years to come.

Think About Big Purchases

We’ve used the term “impulse buy” several times so far. What exactly is an impulse buy? To put it simply, it’s a purchase that you make that you didn’t think about it. You bought it on a whim. If you’re an impulse buyer, you can instil a rule to help curb that habit, though.

Any time that you think you want to make a purchase, sit on it for three days

Consider the purchase in every aspect. Analyse how it would impact your finances. Ask yourself key questions, like, “Do I need this? Will I use this? Will it add value to my life?” Needs and wants are different, of course, but anything that you need should be higher on your list of pending purchases than anything you want.

If you’re still considering purchasing the item after three days of waiting, then it’s more likely that whatever it is will add value to your life. That makes it a more justifiable purchase and one that you can probably make without feeling too guilty.

Learn to Say No

The most challenging aspect of spending money is telling yourself or others, “No.” No one wants to be disappointed, and no one wants to disappoint themselves. If you can learn to tell yourself no when you want to buy something, then you can keep your spending habits in control. Ultimately, this is the best way to stop spending so much money.

Key Takeaways

If you’re looking to attain financial freedom, controlling your spending habits is the best way to do so. Get rid of credit cards, since they aren’t actual money, and start spending wisely. If you can eat in for most of your meals, and justify your purchases, then you’re on the right track. Most importantly, though, learn how to say no to spending money. If you can tell yourself no, and listen, then you’ll be less likely to spend money frivolously in the long run.

Tom
About author

Fully qualified CISI Investment adviser for 5 year. Managed UK private client portfolios.
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