How to Stop Overspending

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Have you ever felt that you can’t stop spending money you don’t have?

If so, you’re not alone. In fact, a 2024 study found that 74% of Americans believe they overspend. Here’s how to stop overspending — not just today but for the long haul.

1. Create a Personalized Budget

Having a personalized budget is one of the quickest ways to get your finances on track.

Here’s a quick rundown of how to make a budget:

• Figure out your income
• Jot down your expense
• Write down all of the due dates for your bills
• Create your budget

2. Review Your Budget

No one budget will last forever. As your income or expenses change, take the time to review your existing budget and make changes accordingly.

Say, for example, you get a pay raise from $4,000 a month to $4,500 a month. If you’re trying to stop overspending, pretend you don’t have that extra money at all. This can help you avoid spending it on things you don’t need. Instead, put that extra $500 toward essentials — like bills, debts or savings.

Check in with your spending every few months. Review your bank accounts or credit card statements to see if you’ve started spending more — or less. If numbers have increased, find out why and adjust as needed.

3. Create Savings Goals

One of the psychological reasons for overspending is a lack of clear direction — that is, you might overspend if you don’t have a reason not to. Fortunately, setting a few short- and long-term savings goals can help cut down on spending and keep you focused on what’s really important.

Take the time to write down some savings goals. Do you want to buy a car or go on a trip? Are you planning a wedding or retirement? Having a goal to visualize can help you put your money toward savings rather than spending.

4. Find Other Ways to Manage Stress

When people are overwhelmed or stressed, they often turn to shopping. One study found that people will spend money on experiences over material items when stressed — but spending is still spending.

The next time you’re feeling stressed, find other ways to comfort yourself. You can try:

• Watch a movie you already own or have access to through streaming services
• Read a book you already own or go to the library
• Take a bath or try another at-home self-care

5. Never Shop Without a List

Another cause of overspending is shopping without a list. Whether you’re shopping online or in-person, put together a list before you get in the car or open a browser window.

Remember to cross-reference the things on your list with your budgeting categories.

6. Track Your Spending

There’s a few ways to do this. You could use a personal income and expense tracker. Or you can jot down every expense you make — no matter how small.

Other Options Include:

• Checking your bank or credit card statements every week
• Categorizing your expenses based on wants and needs (or fixed and variable costs) and review them each month
• Use an online budget spreadsheet (you can also print these off)

7. Don’t Buy Name Brands

Generic items are often — but not always — cheaper than brand-name goods. For example, the latest FDA data estimated that generic medications cost 80% to 85% less than brand-name meds .

Compare the costs of different brands before you buy. Check for things like per-unit pricing and current discounts. Consider shopping at discount stores to save even more.

8. Leave the Credit and Debit Cards Behind

If you can’t stop spending money you don’t have, your credit or debit cards might be partly to blame. Leave these cards behind — or bring one strictly for emergencies — and use cash instead. You can’t spend what you don’t have.

9. Automate Savings

If you want to stop spending money impulsively, you may want to automate savings. Here’s how to do it:

1. Link your checking and savings accounts.
2. Set up direct deposit for your paycheck.
3. Schedule a recurring transfer that automatically moves money from checking to savings.

If possible, schedule automatic deposits into your savings account at the beginning of the month — or right after you get paid. This will give you less money to spend on things you don’t need.

Pro tip: Use a high-yield savings account. Some banks offer APYs of 3.60% or higher. Some also let you set up different savings buckets that can help you stay on top of your goals.

10. Get Rid of Convenience

When it’s easy to spend money, you’re more likely to do it. This includes the obvious — like credit cards — but it also includes:

• Payment apps on your phone
• Autofill options with your payment information (think: your Amazon account)
• Apps that let you automatically reload your account balance (like Starbucks)
• Autopay (for things like monthly streaming services)

11. No Spend Challenge

Making a game out of your finances can be an effective way to build financial literacy, meet your savings goals and track your spending. You can do this through an app, or you can try setting some financial challenges for yourself.

Say, for example, you want to stop overspending for a week. You could set a no-spend challenge for seven days. Basically, don’t spend any money on anything other than the essentials.

But what if you want to stop overspending on a specific category — like groceries? You could try the pantry challenge, which entails using ingredients you already have in your kitchen before you hit the store.

If you have a friend or partner who wants to cut down on overspending, you can do a spending or saving challenge with them to keep you both accountable.

12. Use Budgeting Apps or Tools

Online budgeting apps, savings buckets (through your bank) and other financial tools could help you keep track of how much money your spending and your progress towards your goals.

13. Know Your Triggers

Are you drawn in by discounts or “buy-one, get-one” deals? Do you spend more when you’re stressed or anxious? Do you find yourself easily distracted when at the store? Is it hard to say no when a friend invites you out?

Knowing your spending triggers — that is, the things that make you more likely to spend money even when you shouldn’t — is an important step to stop overspending. It might not keep you from spending money you don’t have entirely, but paired with other tools (like budgeting apps) it can help.

14. Review and Reduce Expenses

Look over your expenses and see what you can cut out. This doesn’t only mean canceling that Netflix subscription or gym membership you never use. It also means negotiating or shopping around for lower rates.

For example, you could contact your insurance provider to see if you can lower your premium. Or you could consider refinancing your car loan for a lower interest rate or monthly payment amount. Just be aware that refinancing could mean resetting or increasing your repayment term.

15. Seek Other Help

According to health experts, people with ADHD sometimes have trouble with things like keeping track of bank balances, spending and long-term saving. Looking for resources geared towards people with ADHD may be more helpful.

If your overspending is causing you to take on a lot of debt, look into programs like Debtor’s Anonymous.

The Bottom Line

There are many emotional and psychological reasons for overspending. But sometimes what you need is a clear plan for how you want to use your money and a method to track your income and expenses.

Even if things get tough, don’t give up. You can stop spending money you don’t have. It just might take some time and persistence — and a combination of several of the methods above.

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