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How to Address Overspending Habits

Spending can quickly get out of hand if you don’t have a budget and you have the “I want” syndrome. You start with good intentions, but before you know it, you’ve spent money that was earmarked for saving, or something else. What happened? In order to get to the root of the problem and address overspending issues, there are a few things you must do:

Understand Why You Spend & Find Your Triggers

You can’t stop your overspending habits if you don’t know why you do it. For most individuals, there are psychological and emotional issues behind this bad habit. Knowing what triggers you to spend can help you avoid certain situations or keep temptations at bay. For instance, perhaps certain environments cause you to overspend. If you love going to the mall and that propels you to spend, stay away from it. Or, if you’re an online shopper, block those sites that you frequently visit and remove all financial information so you can’t easily slip up.

You may also spend depending on your mood. If you’re having a bad day, do you reach for your wallet, or invite friends to go out for drinks? Think about your lifestyle. Do you feel like you need to have the latest clothing or shoes to make a statement? The psychological reasons behind your overspending are worth exploring.  If you grew up where money was scarce, this may be your way of coping with those feelings. Once you understand the deeper reasons behind your overspending, you will be able to take steps to rectify the problem.

Tracking What You Spend

One of the best ways to identify what you are spending is to track all your expenses. Start with one month and track every single dollar you spend. Lunches, coffee, magazines, and even picking up a candy bar at the convenience store adds up. Once you can see it, it can help put things into perspective and help you overcome those little “ghost” expenses.

Make Cash the King

If you have a huge problem with being able to use your card whenever you want, it’s time to ditch them and start using cash. Cash will not only help you stick to your budget, but when you run out, you are out. Try putting a certain amount of cash in an envelope and keep your cards at home. Many people become so accustomed to using their cards, they don’t realize how much money they are actually wasting. Cash forces you to budget and itemize the needs from the wants. Additionally, it forces you to think about your money and adjust your spending habits to match what you have, instead of taking for granted the fact you have money in the bank.

Set Some Financial Goals

Setting financial goals and working toward them will not only give you a sense of achievement, but will give you a purpose for your money that goes beyond spending. Try to use cash only for a month – call it a no-spend month, and you can only pay bills; nothing extra. This goal may be hard to accomplish if you’re used to spending, but think about the rewards and sense of pride you’ll have if you complete the goal. Little steps make big differences in the long run.


The big “B” word. If you plan on attacking your bad spending habits, you must create a budget. This means you have to list all your income and all your fixed expenses. Once you get those out of the way, it’s time to take a look at what you spend your money on outside of fixed expenses and start making some adjustments. If you use your card a lot, looking at your bank statement will help identify spending as well. Ultimately, you want to change those unnecessary expenses into opportunities for saving or paying off debt.

Make Your Money Work For You

You have a job that pays you money, but is your money working for you? It’s time to look at your money differently and assign it a job. Every dollar you earn should have a purpose. Don’t just let it sit there. If it’s earmarked for savings, put it in the savings account. If you need to put money aside for retirement, do it immediately (and optimally through an automatic transfer) so you won’t give it a second thought. By making your money work for you, it will help you avoid the urge to spend it.

Although it may be difficult to curb overspending habits, it is possible. Once you start seeing the fruits of your labor, you’ll feel better about saving and it may become easier to keep going.

This content is developed from sources believed to be providing accurate information. The information in this material is not intended as investment, tax, or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.

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