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Do you always find yourself with no money at the end of every month?
You’re checking your bank account and scratching your head wondering where all your money went.
You tell yourself, “Wait a minute… I just got paid, but where’s my money? What did I spend it on?”
I know you have good intentions, my friend.
You’re trying really hard to develop a good relationship with your money so that you can:
- Pay off your debts
- Stop living paycheck to paycheck
- Build a healthy savings account
- Enjoy life without having to worry about being broke
- Reach financial independence
The problem is you’re spending too much money (and spending more than you make) on random things without realizing it.
And don’t worry, you are not alone.
In fact, these are the top 10 ways Americans waste money according to a CNBC article.
This behavior is quite common and today, I’m going to show you how to stop spending money you don’t have so you can finally pay off debt and bank more money in your savings account.
How to stop spending money
Like you, I was in the same position not too long ago.
Fortunately, by changing my money mindset and following these steps, I went from having $0 in savings to over six figures in just a few years!
A huge portion of these results came from finding ways to save money by cutting things that don’t add any value to my life.
So, what is the best way to stop spending money? How do I stop myself from spending money?
Trust me on this one. There are many ways to cut those bad spending habits without sacrificing the quality of your life.
Go ahead and follow these 9 simple steps to curb your spending so you can build a better relationship with your money.
They are the exact steps I took to see my savings skyrocket within a year!
1. Understand the psychological reasons for overspending
There are so many reasons why people spend without realizing why.
One common reason why people spend is because they experience negative feelings such as boredem or sadness.
Do you remember the last time you went on a shopping haul because you were either bored or upset about something?
Retail therapy is real. When we have negative feelings or emotions, we will splurge at the moment to help lift our spirits.
Another reason why we spend is because we feel that we don’t have enough so chasing material objects make us feel better about ourselves.
According to an article from Psychology Today, “Shopping allows people to visualize themselves in a “better” life, where they’re dressed in nice clothes or surrounded by nice things. Buying makes these visualizations a reality.”
You can learn more about these psychology theories to help you understand why you may be overspending.
2. Know why you want to stop spending money
In addition to understanding the psychological reasons for overspending, it’s important to know why you’re looking for ways to stop spending money.
For example, are you trying to stop overspending because you want to:
- Put an end to your shopping addiction that’s causing harm to you and your family?
- Stop living paycheck to paycheck so you can start a savings fund for emergencies?
- Pay off your student loans as fast as possible?
- Get out of debt so you can start investing?
- Save money for a down payment towards your first home?
- Build wealth so you can reach financial freedom before 50?
Overall, it’s important to dig deeper and understand what’s driving you to look for solutions.
By making a conscious effort to understand yourself and your situation, you’ll be more motivated to save money and achieve your financial goals.
You’re now one step closer to answering the question “why am I broke and struggling financially“ all the time.
3. Track and analyze your spending habits
This step is critical because you need to understand your lifestyle, how you are spending money, and where your money is going. A plumber needs to follow the pipes to see where water is leaking before they can fix the problem.
- Are you buying a new outfit including new shoes almost every week?
- Are you having way too much fun parting with your friends every week?
- Are those random splurges on snacks, candies, and sugary beverages robbing your wallet?
- Are you throwing all your money away on alcoholic beverages at restaurants?
In order to have a better picture of your spending habits and lifestyle, you will need to bust out all your past transactions (e.g. credit card statements, bank statements, receipts, etc.) and analyze your spending behavior.
4. Don’t be scared or panic about your past spending habits
As you track and analyze your past transactions, you may be surprised or even devastated when you see those numbers add up.
But don’t panic and don’t feel bad because we are going to fix that going forward.
Instead, feel excited and imagine how much money you’re going to start saving!
The fact that you’ve gone this far means you’re already ahead of most people!
Once you have a clear image and know exactly where your money is going, give yourself a pat on the back.
A quick glimpse of my past spending habits
To illustrate that spending money on unnecessary things is real, I’m going to go through a quick example of the random things I bought in a year. Eek! 🙈
Your spending habits will likely be different from mine, but I only illustrate my example to show you that the small purchases that seem insignificant are actually putting a dent in your wallet.
What you spend will be different from what I spend and vice versa. It’s best for you to dive into your last 3-6 months of transactions to really understand your spending habits.
I purchase almost everything on my credit card for cash rewards, so I logged into my account online to check my history of transactions and the numbers kind of surprised me!
Amazon shopping haul: $1,000 a year!
I had no idea I was spending so much money on unnecessary things at my frequent online trips to Amazon! Those small items that cost $10-$20 each time didn’t seem that big of a deal, but when you fill up your carts and add up the numbers, you’re going to be in for a surprise!
Spending on clothes: $2,000 to $3,000 a year!
I’m a lady who loves shopping online for clothes, shoes, makeup, skincare, and female things.
Whenever I see 50-80% off sales at my favorite clothing stores, I end up buying WAY more than what I could actually consume despite it being “the best” deal ever. *FACEPALM*
Outing with coworkers: $2,400 a year!
In the past, those dinners at restaurants and bars cost me on average $200 a month! Happy hours, anyone?
Snacks and drinks: $1,500 to $2,000 a year
On top of that, I had no idea that my frequent small purchases on snacks like McFlurry from McDonald’s and Starbucks fraps (NOT including my regular daily coffee or tea) were robbing my bank account!
I also can’t forget to include those bubble/boba tea drinks that I buy with my husband 2-3 times a week and each cup costs $6.30 per person!
When I look at my credit card statements, it tells me I spent over $150 in a month on bubble tea alone!
That list is just a few examples of things I spent on in the past. That alone adds up to over $7,000 per year!
Now, I didn’t completely cut everything, but I managed to prioritize and reduce unnecessary spending.
These numbers are real and they don’t lie when you actually take the time to analyze your past transactions!
Mind you, this doesn’t even include my basic living expenses like daily coffee or tea from Starbucks! No matter how hard I tried to cut this category out, I just couldn’t.
5. Prioritize your spending
It’s time to take action and prioritize your spending with these simple and effective frugal living tips so you can save money for the more important things in life.
Spend time to prioritize your needs and wants.
First, think about your basic needs like food, shelter, clothes, etc.
Next, think about wants or upgrades that actually ADD VALUE to your life.
For example, shelter is a basic necessity, but if you’re trying to live within your means, do you really need a big house with 3,000 sq. ft. with double garages?
It’s okay if living in a big house is important to you as long as you can prioritize your needs and wants.
Most importantly, be sure you can truly afford it without living paycheck to paycheck and sacrificing your financial future!
6. Determine purchases that actually make you happy
Small indulgences in life keep us going and happy so don’t cut everything out for the sake of saving.
It’s NOT to say that you should cut all your lattes and never eat out in order to save money for the future.
And it’s definitely NOT to say that you girls should completely cut your spending on clothes, makeup, and daily beauty routine.
Related post on how to stop overspending and save money on makeup: Money Saving Tips on Makeup That Every Girl Should Know
Cutting everything and depriving yourself just to save money is not very effective. Most people will burn out and slip back into old habits.
People who lose weight by going on VERY STRICT diets often end up gaining back all the lost weight.
Come up with a spending and savings plan that works for you!
7. Find ways to make extra money for guilt-free spending
It’s always nice to have extra money that goes towards a guilt-free spending account.
But if your income is too low or your budget doesn’t allow room for things beyond your needs, then it’s time to find ways to increase your income or make extra money on the side during your spare time.
If you’ve already done the best you could with your savings plan, but money is still tight, then consider these creative ways to make extra money on the side to supplement income. I recommend you to check out the 21 different ways you could make $100 in extra money every day!
Alternatively, you could also find ways to negotiate your salary so you can increase your income and earn more.
Make a conscious effort to actually bank your extra earnings and avoid lifestyle inflation you can’t afford. It can become quite dangerous when you give yourself permission to spend more money when you earn more.
Do you want an extra $50 a month?
Here are a few ways to earn extra money online.
These are my go-to FREE money resources to earn an EXTRA $20 to $50 a month to help me cover some of my expenses on food, gifts, and other necessities. I can also choose to use this extra money on my guilt-free spending!
Survey Junkie – I use this very popular resource to earn FREE Amazon or Target gift cards and PayPal cash. I get SUPER excited when I’ve earned enough to redeem my FREE cash and rewards because this allows me to enjoy the proudcts I love while reducing or eliminating my spenidng.
Sign up for Survey Junkie here for FREE and earn as high as $45 per survey!
Swagbucks – I’ve been using Swagbucks to earn extra cash, FREE gift cards, and rewards to help me afford birthday and holiday gifts for my friends and family. I’ve also used it to cash out via PayPal for my regular purchases on Amazon, Walmart, food and groceries — things I need and use on a daily basis.
Join Swagbucks for FREE here and get a $5 bonus just for signing up today! Don’t forget to hit the ‘verify’ button in your inbox from Swagbucks to get your FREE $5! It’s something you don’t want to lose out on!
Related post on how to save money and reduce spending by earning free gift cards and cash: Take Surveys For PayPal Money and Earn Up To $50 Per Survey
8. Create a budget for beginners
To budget or not to budget?
To be honest, I’m not a big fan of budgeting because it’s not easy!
However, I have to admit that keeping track of a budget is very helpful, especially at the beginning when you have no idea how to stop spending money on unnecessary things.
Here are the steps you need to take to get your budget going:
- Write all your sources of income (e.g. full-time job, side hustles, etc.)
- Next, write down your write down your fixed expenses (e.g. rent/mortgage, utilities, car payments, insurance, gym membership, cellphone bills, etc.)
- Now, do the same for your variable expenses (e.g. gas for your car, food, groceries, restaurants, clothing, etc.)
After you’ve done all of that, figure out what you want to keep and what you can get rid of to save money.
This is the HARDEST part about budgeting and weight loss – trimming off excess fat.
Prioritize your wants and needs, and keep track of your spending on an excel spreadsheet (or notebook if you like writing things down).
9. Enjoy life and be thankful for what you have
I’m sure you’re going to see amazing results after following through steps 1 to 8 above!
After you’ve followed through all those steps, it’s time to rinse and repeat.
In addition to that, continue to stay positive and be thankful for what you have.
Seriously, practicing gratitude and appreciating every second of your life can really help you financially.
How do I control my spending?
This is how I train myself to spend less money.
Sometimes, all it takes is to practice gratitude and remind yourself of where you are today compared to where you were before.
Thinking back from my childhood, my family rarely dined out. Celebrations were held at home with home-cooked food because eating out was too expensive. What mattered most was spending quality time with family and friends, not eating expensive food.
I’m not suggesting that you should deprive yourself today (you should enjoy life), but appreciating what you have now can remind you how lucky you are because there are a lot of people who would die to be in your shoes.
The fact that you are living and breathing with no serious health issues is the best gift.
Learning how to be thankful reduced my urges to make spontaneous and unnecessary purchases.
It’s okay to spend money on things that make you very happy. If taking that trip to Europe or Asia to experience different cultures and create memorable memories is what makes you happy, then go for it! That’s money well spent when you only buy things you love.
How do I stop myself from spending money?
I’m not going to lie. Being bored has cost me a lot of money.
When I’m bored at home and there’s nothing good to watch because I’ve caught up with the latest shows, I find myself browsing online mainly Amazon looking for great deals.
“The hairbrush I wanted is on sale! I gotta buy it now before the sale ends!”
I swear – I was only going to buy the hairbrush because I needed to replace my older one.
By the time I hit that checkout button, I had more than just that hair product. My online cart had the following:
- Hairbrush ($9.23): to charge my phone at the office.
- Hair styling product ($8.29): I wanted to try a different hair styling product to see whether it’s good.
- LED flashlight ($27.99): in case we lose power at night.
- What Do You Meme ($35.99): doesn’t hurt to have more card games at home when friends are over!
- USB cables ($12.99): this was for my husband. He wanted more USB cables. See! I didn’t forget about him.
- USB wall charger ($9.99): for my husband again. Can’t charge a phone without a wall charger!
- Cardholder wallet ($23): Oh, and did I say this is for my husband as well? He didn’t like his bulky wallet; it was full of reward cards.
How did one item grow into 7…
How did $9.23 turn into $127.48?!
I’m telling you, boredom shopping is dangerous and most of us aren’t even aware of it until it’s too late!
Tricks to stop spending money when you’re bored
Don’t worry – you won’t need to seek professional help to tackle this problem. The solution is quite simple.
The key to stop spending when you’re bored is to prevent yourself from getting bored in the first place!
Keep yourself busy by learning and understanding what frugal living really means and you won’t be tempted to buy things out of boredom!
Spoiler alert: Frugal living is NOT about being a cheapskate and living under a rock!
This is actually harder than it sounds because we’re so accustomed to instant gratification. Everything you want is a tap away. You want it, you got it!
However, if you’re serious about making changes to your life, you can overcome this bad habit easily.
Here are some great ideas to help you get started!
When I catch myself sitting on the couch or browsing on my phone, I go out for a run.
On days where it’s too cold or dark to run outside, I go for a nice workout.
If running isn’t your thing, you can easily find home workout videos on YouTube where you can follow along at the comfort of your home.
Exercising is great for your body and mind! In this case, it’s great for your wallet too!
Pick up a new hobby:
Rather than wasting my time and money browsing online, I wanted to pick up a hobby where I can share my experience and help people around the world become better with their personal finances.
I thought about starting my own YouTube channel but I wasn’t comfortable having my face all over the Internet. So instead of doing that, I started this personal finance blog!
Starting this blog was perfect because it gives me the flexibility to write about personal finance and how I save money on my everyday spending no matter where I am. I can be at the coffee shop, a road trip, or the comfort of my bed.
There are hundreds of things you can do to keep busy. Stop making excuses and take control of your life!
Final thoughts on how to stop spending money
Those are the steps I took to reduce my spending on unnecessary things.
This allowed me to better manage our household finances.
Just by following these steps, I was able to save over six figures in a couple of years. That was of course, with the help of finding ways to increase my income and invest my savings. You need to understand that there is a limit to “just saving money” alone.
While building wealth in my financial journey, I enjoy living the moment and appreciating the present.
My whole point isn’t to tell you to completely stop spending and hoard all your money. At the same time, you don’t want to mindlessly spend all your money to live an ‘extreme YOLO’ lifestyle.
It’s important to create and maintain a good balance with your money, health, and life in general.
Readers, do you have any tips on how to stop spending money on unnecessary things? What do you spend most of your money on? Leave your comments below!