How To Stop Overspending: 5 Steps You Can Take

Young girl have problems with her credit card till shopping online.
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Have you ever spent more than you planned to and then felt guilty about it later? It’s easy to beat yourself up for overspending and assume that you’re the problem. But the truth is that the problem of overspending is a lot bigger than you.

According to a 2022 study from Slickdeals, impulse spending increased by about 14% from 2021 to 2022, and the average consumer spends about $314 per month on impulse purchases. And even more drastic, about 13% of U.S. consumers surveyed in June 2022 spent more than they earned in the previous six months, according to a report from Pymnts and LendingClub.

There are plenty of different reasons for this overspending, from lifestyle creep to fear of missing out to poor planning. And it’s hard not to blame the high inflation we’ve had over the past several years, which has made just about everything more expensive.

How To Stop Overspending

The good news is that regardless of why you’re overspending, there are steps you can take to fix it. These five solutions may not be a perfect fix, but they’ll help you reduce your overspending and have more good months than bad ones.

Make Your Money Work for You

1. Create a Budget

First and foremost, getting out of the habit of overspending requires getting on a budget. It’s only when you have a budget that you’ll know where your money should be going versus where it’s actually going.

The first step to creating a budget is to figure out where your money is currently going. You can try tracking your spending for a few months to find out or simply looking back on bank or credit card statements for the past few months.

Once you know how much you’re spending in each category, you can sit down and decide how much you actually want to be spending. Be realistic — don’t expect you’ll be able to cut your eating-out budget from $250 per month to $50 in a single month. But also challenge yourself to spend less than you have been.

Finally, track your spending throughout the month to make sure you’re sticking to your budget (and make adjustments if you aren’t). The easiest way to track your spending is by connecting your bank and credit card accounts to a budgeting app.

Make Your Money Work for You

2. Know Your Spending Triggers

One of the reasons why there’s no quick fix for overspending is that all of our triggers are different. Some people are emotional spenders and feel the urge to buy when they’re feeling happy, sad or anything in between.

Other people shop to keep up with their friends. In fact, a 2022 study from LendingTree found that almost 40% of Americans overspend to impress other people. Maybe you’re overspending on clothing to keep up with those around you or buying dinners you can’t afford because you didn’t want to turn down the invitation.

Finally, some people simply shop because it’s a habit. You’re sitting on your couch at night watching a show and find yourself opening your favorite shopping app or scrolling through the new arrivals at your favorite store.

Whatever your reason for spending, identifying your triggers is the first step in eliminating them. Once you know your triggers, you can make a plan to avoid them. 

3. Eliminate Temptation

One of the easiest ways to reduce overspending is to make it more difficult to do. First, get rid of what often causes you to make a purchase in the first place. Some strategies to try include deleting the app for your favorite store, unfollowing influencers who make you want to spend, or unsubscribing from sale emails from your favorite stores.

Make Your Money Work for You

Next, get rid of anything that makes it too easy to spend. For example, if having your credit card with you at all times makes it too easy to spend, then only carry cash instead. When you’re out of money, you can’t continue spending.

Another strategy to make spending more difficult is to delete your saved payment information from stores where you tend to overspend. Do you find yourself regularly making impulse purchases on Amazon late at night? Delete your credit card information so you have to physically type it in each time. Just that added hurdle might be enough to help you cut back.

4. Separate Needs From Wants

One of the most significant ways we talk ourselves into overspending is by convincing ourselves that we need something. We tell ourselves that we need that daily cup of coffee or the nicer car or the new work outfit. 

Part of what makes it difficult to separate needs from wants is that we confuse needing an item with needing the most expensive version of it. Yes, you need to eat. But you could solve that problem by buying a week’s worth of groceries instead of eating out. And sure, you might genuinely need clothes to wear to work. But you could buy suitable items at a cheaper store. Buying the high-end version is a want, not a need.

Make Your Money Work for You

One way to solve this problem is by keeping a list on your phone of items you need. When you think of an item you need, rather than immediately buying it, add it to the list. This gives you time to shop around for an affordable yet quality version of it. Additionally, you may find after a couple of days that it wasn’t quite as much of a need as you thought.

5. Pay Yourself First

Do you want to stop overspending on unnecessary or impulse purchases? The best way to do that is to use that money for something else instead: paying yourself first.

The concept of paying yourself first is when you put money toward your own financial goals before spending it. Rather than saving what’s left after your spending, you spend what’s left after your saving.

There are several benefits to paying yourself first. If you transfer money from your checking account to your savings account right after you get paid, you hardly have time to miss the money before it’s gone. And yet you’ve managed to boost your savings while reducing the amount you can spend this month. That means that while you’re cutting back on your spending, you’re also making progress on your financial goals.

Make Your Money Work for You

The Bottom Line

It’s easy to feel guilty about overspending, but the truth is that we’ve all been there. And try as you might, you’ll probably never be perfect with money. The good news is that you can implement these few simple tricks to help get rid of a lot of your overspending.

It’s also important to note that for some people, their spending problem isn’t about spending at all. Instead, it’s an income problem in that they don’t earn enough to meet their financial needs. If that’s the case for you, then you can focus your attention instead on finding ways to increase your income.

Our in-house research team and on-site financial experts work together to create content that’s accurate, impartial, and up to date. We fact-check every single statistic, quote and fact using trusted primary resources to make sure the information we provide is correct. You can learn more about GOBankingRates’ processes and standards in our editorial policy.

Make Your Money Work for You

About the Author

Erin Gobler is a personal finance writer and journalist with experience covering topics such as investing, credit cards, mortgages, insurance and more. Her work has been featured in major publications like Business Insider, Fox Business and Time. Erin received her bachelor’s degree from the University of Wisconsin Oshkosh in 2013, studying journalism and political science.
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