How to Stop Spending Money – 6 Tips to Avoid Overspending

Wanting more is an innate part of the human psyche. It inspires progress and innovation. But in an age of one-click purchases, targeted social media ads and same-day delivery, the temptation to buy more than we need or can afford can spiral out of control.

A 2023 Harris Poll survey found that 84% of Americans with a budget admit to sometimes exceeding it, while another survey found that almost 40% of Americans have overspent to impress someone else.

It doesn’t help that living expenses in the United States continue trending up as wage levels struggle to keep pace. Almost 78% of Americans say they’re living paycheck to paycheck.

However, no amount of income outruns poor spending habits. There are far too many examples of people who found immense wealth and ended up broke. The reason? Poor spending decisions and habits.

Every financial situation is unique, but overspending is something you can control. Left unchecked, it will prevent you from reaching financial goals like buying a house or car, paying for college, saving for retirement or getting out of debt.

Fortunately, with some self-awareness, planning and discipline, you can curb overspending and take control of your finances. Let’s look at six practical tips on how to stop spending money and avoid the common pitfalls that lead to overextending yourself.

Why It’s So Hard to Stop Spending Money

Today, anyone with an internet connection and a credit card has the global marketplace in the palm of their hand. The convenience, ease and — let’s face it — joy of shopping makes it all too easy to overspend.

It’s often the result of common actions or routines. A brief scroll on social media or emails and you get flooded by ads that know exactly what you need. Emotional and psychological factors are often at play behind excessive spending.

Unsubscribe, says Thembi Aquil, founder of Sensible Living, a financial wellness company. “You’re less likely to want it if you don’t see it.”

The Psychology Behind Spending

For most people, shopping provides an emotional high — retail therapy. The thrill of getting your hands on something new releases tons of dopamine in the brain, creating a rush of good feelings.

Psychologically, we’re wired to pursue what feels good in the moment. The problem is that this instant gratification for a shoppers’ high often comes at the expense of long-term financial security.

We make too many purchases to fill an emotional need, such as for connectedness, self-esteem, or self-worth. Marketing campaigns are effective at tugging on emotions to convince us we “need” certain products to be happy, successful, or complete. Understanding your emotional triggers for spending is an important step in getting it under control.

Not Tracking Your Spending

When you’re not keeping close tabs on where your money is going, it’s easy for spending to get out of hand. A coffee here, an online order there — it all adds up. Before you know it, you’ve blown through your budget or maxed out your credit card without even realizing it.

Aquil recommends tracking every penny you spend for one month. “This exercise can be eye-opening, revealing patterns of unnecessary purchases and helping you identify areas where you can cut back,” she said.

Budgeting apps can help. So can following a plan like “Zero Based Budgeting” or “The 50-30-20 Rule.” Once you pay closer attention, you’ll likely be surprised by how much you’re spending on things you don’t need.

Social Media

While social media has its benefits, it also leads us to compare our lives and possessions to others. When you’re bombarded with images of influencers having fun, your friends’ exotic vacations, designer outfits and slick new gadgets, it’s only natural to want the same for yourself. There is also the fear of missing out (FOMO), particularly among younger generations.

But keeping up with the Joneses is a sure-fire path to overspending and debt. On social media, people highlight only the best parts of their lives — the purchasing, and not the debt. Don’t fall into the trap of trying to match an unrealistic, curated version of reality.

6 Tips to Stop Spending Money

It is impossible not to spend money. However, it’s possible not to spend unnecessarily. In fact, learning how to control your spending is a skill anyone can master.

Tips such as creating a budget, tracking expenses, using a shopping list, avoiding impulse purchases, and finding free or low-cost alternatives are tactics that work. They also build excellent financial habits.

Start with one or two of these tips and build from there. As you see positive results, you’ll be encouraged to keep going.

Start Shopping with Intention

One of the best ways to avoid overspending is to shop with a clear purpose. When you go into a grocery store or browse online with a specific shopping list and defined budget, you’re much less likely to make impulse purchases or get sidetracked by deals on items you don’t need.

Set a budget for each item and an overall spending limit. Having this level of intention will help you stay focused and avoid getting sucked into buying something don’t really need.

This applies across the board. If you see something that wasn’t on your initial grocery shopping list, don’t buy it, no matter how good the deal appears to be.

Buying things just because they’re on sale doesn’t save you money. Get in, get what you need, and get out. The less time you spend in a retail environment, the less you’ll be tempted to spend.

Cook at Home More Often

Eating regularly at restaurants or ordering takeout are budget busters. Cooking more meals at home can save a significant amount of money each month.

Cooking at home offers other benefits besides just saving money. It’s an opportunity to eat healthier since you control the ingredients. It’s also an easy way to bond with your family. Get your kids involved in meal prep and teach them how to make their favorite dishes. Exploring new recipes and cuisines can be a fun adventure, and the best part is you still get to eat your creations, even if they don’t turn out like the pictures accompanying the recipe.

Treating yourself occasionally to a restaurant meal is fine, but making home-cooked meals the norm, you’ll spend far less than if you eat out multiple times a week.

If you do dine out, you can save money at restaurants by finding coupons and special deals.

Stop Buying Brand Name

Brand-name products can eat up a sizeable portion of your budget, often unnecessarily. These days, there are high-quality generic or store brand alternatives for almost every product, from groceries and household items to clothing and medications.

While the savings on each individual item may seem small, they add up.

For example, let’s say your family goes through two boxes of cereal a week. If the brand name costs $4 per box and the generic is $3, switching to generic would save you $2 per week, or $104 a year. Apply that same concept to all the staples you buy, and you’re looking at hundreds or even thousands in savings.

The argument that generic means lower quality is often more about marketing than reality. Many times, the products are nearly identical. Where possible, experiment to find the generic brands you like just as much as the brand names and watch your spending drop.

Cutting coupons and looking for sales on brand names you struggle to give up is another way to spend less without feeling deprived.

Start Using Cash

It’s psychologically harder to part with cash than it is to swipe a card. When you hand over physical bills, you see and feel the money leaving your possession, which makes you consider your purchase more carefully. With credit and debit cards, there is less friction, making it all too easy to overspend without even realizing it.

To curb overspending, consider switching to a cash-only system, at least for discretionary spending categories like shopping and entertainment. Each month or week, withdraw your budgeted amount of cash for these areas and divide it into envelopes.

Start carrying cash so that you’re limited by the amount of money you have on hand. Once the envelope is empty, no more spending in that category for the month or week.

Also: visiting the ATM for more cash every time you run out defeats the purpose. This system only works if the amount you initially withdraw is truly your spending limit.

“You can also put your spending money in a separate account each pay period,” Aquil says. “Again, once it’s gone, you can’t spend until you add more the next pay period.”

Avoid Impulse Buying

Impulse buys are a major budget-breaker. We’ve all been there. You see something you weren’t planning to buy, but on a whim, you convince yourself you just have to have it. You often regret the purchase later or even forget about the item altogether.

One way to combat impulse spending is to institute a mandatory waiting period for any unplanned purchase over a certain dollar amount. For example, if you’re buying anything over $30 that is not a necessity, you’ll have to wait for 30 days.

If at the end of that time you still want the item, then buy it. More often than not, though, the initial urge will pass and you’ll have saved yourself from making a purchase you didn’t really need.

Another trick is to calculate how many hours you’d have to work to afford the item. Let’s say you make $20 an hour and are tempted by a $100 pair of shoes. Ask yourself, are those shoes really worth five hours of your labor? Framing it this way puts the true cost into perspective.

Visualize Your Goals

Learning how to stop spending money on unnecessary things is a crucial step in taking control of your finances and building lasting financial security. By implementing strategies like creating a budget, shopping with intention, cooking at home, avoiding brand names and impulse purchases, and using cash, you can significantly reduce your spending and free up more money to save and invest in the future.

Remember, changing habits takes time. Be patient with yourself. Start by implementing one or two of these tips and gradually add more when you get comfortable. The key is consistency. Minor changes sustained over time will add up to big results.

Keep your eyes on the prize(s): having no credit-card debt, budgeting for a baby, saving for a bigger home, paying off tuition and saving for retirement are attainable, if you learn to control spending.

Additional Resources to Stop Spending Money

If you need help getting started with your new low-spending plan — or if you need help with budgeting or other tactics we mention above — that’s where InCharge excels.

InCharge’s credit counselors train hard to look holistically and help you get into the best financial shape of your life. They also have a grasp of all the wonderful tools you can use to reshape your monthly budget and recalibrate your spending habits.

There are many free resources available.

Some related articles that also may interest you:

• How to Cut Expenses
• Budgeting Tools and Resources

InCharge has an A+ rating from the Better Business Bureau (BBB) and is certified by the National Foundation for Credit Counseling (NFCC).  Call 877-764-5798 to learn more about how to retake control of your finances.