How To Stop Spending Money: 5 Ways To Cut Unnecessary Spending
When it comes to spending money, everyone has their own weaknesses. You see something you want to buy, and your mind enters a tug-of-war. One side of your brain says save. The other says spend. It’s completely natural. And both sides take turns winning over the course of time. But when spending becomes the stronger emotion, a simple mind game can turn self-destructive. If you’re hoping to strengthen the savings muscles in your mind, here’s how you can avoid unnecessary spending.
Why We Overspend
Your neighbors just bought a new TV. It looks nice and you wonder if you need a new one too. This may seem like a good thought process, but it can quickly lead to your own financial woes. You should always buy things because you can afford them, not because you want them. That new TV might seem appealing, but if you can’t afford it, that TV won’t be worth the money or the heartache in the long run.
5 Ways to Reduce Spending
- Create a Monthly Budget: Without a budget, you’ll never truly know what you can and can’t afford. With a budget, your mind is already made up when you encounter those tricky spending dilemmas. Follow the six basics of building a budget and you can eliminate a lot of unnecessary spending.
- Track Your Spending: If your paycheck always disappears too quickly, it might be time to track your spending. Tracking is an important part of budgeting. So write down your monthly expenses or look at your bank statements to see what you’re buying and where your money is going.
- Shop with a Goal in Mind: Avoid aimlessly browsing the aisles of a store or mindlessly scrolling through Amazon. You should always shop with a goal and stick to that goal. Try to avoid going to the store for a new toothbrush and leaving with a shopping cart full of items you never intended to buy.
- Shop with a List: The best way to avoid unnecessary shopping is to never go shopping without a list. Write down every item you need to buy, then check your budget and resist the urge to add to your list on the fly.
- Stop Spending Money at Restaurants: Food is one of the necessities of life. But overpriced, on-the-go food, where you pay primarily for convenience, is unnecessary. By making a commitment to eat more dinners at home and pack more lunches for work, you can cut out a significant amount of your unnecessary expenses. To help with your goal, make a weekly meal plan. This will focus your shopping and lower your overall food costs.
What is Not a Good Way to Prevent Unnecessary Spending?
- Shopping To Feel Better: Having new things can feel nice. After all, who doesn’t love a nice set of headphones or those brand new shoes? But that doesn’t mean you can spend all your spare cash on those things. If you’re new to budgeting, you can follow an established method like the 50/30/20 rule, which allows you to buy fun things while saving.
- Social Media: Scrolling through Instagram can be a lot of fun, but be careful not to fall into marketing traps. Block and hide ads where you can, and if you find that a social media influencer is a bit too successful at influencing you, it may be time to unfollow them.
- Paying With Plastic: A common problem people face is overspending when using a credit card. If you shop with plastic, it’s easier to spend money because you don’t see it leave. If sticking to a budget is hard for you, it might be smart to start paying for things with cash. Seeing and feeling the money as you hand it away can help to shift your mindset about spending.
- Lack of Self-Awareness: Falling into bad financial habits is far too easy, so it’s important to be aware of how you spend money. Know your weaknesses and remove those temptations whenever you can.
How to Make These Changes Last
- Stick to Your Budget: It's not enough to make a budget, you need to stick to it! It might be hard at first as you work to shift how you spend your money, especially if that includes working to cut back on unnecessary spending. But it’ll be worth it if it helps you spend less money.
- Find Your ‘Why’: The best way to save money and use it wisely is to use it with intention. Don’t be thoughtless when it comes to how you spend your money or why you spend it! Set goals, like buying a house or paying off debt, and reward yourself when you meet those milestones.
- Aim to Finish Your Goals: Once you have a goal in mind, it’s often easier to save. Think about the vacation you’re working toward or the dream house you’re saving up to buy. Don’t lose your chance to meet your financial goal by getting something you don’t need.
What Is The 50/30/20 Rule?
As mentioned above, something you can look into is the 50/30/20 budgeting method. It’s one of the most common percent-based budget plans. It’s a straightforward way to create a successful budget. The idea is to break your income into three categories.
- 50% goes to things you need, like housing, food, and insurance.
- 30% goes to things you want, like clothes and subscriptions.
- 20% is for savings, like your emergency fund, 401(k), or down payment for a house.
It’s a great way to stay on top of your bills, while helping you to continuously save. It also factors in the fun things you want to buy so that you don’t need to worry about balancing your wants vs. needs yourself!
The key to living a more financially freeing life is to create better money habits. We know that’s easier said than done, but it can be done. Use these tips to start working your way down the path of success. Slowly but surely finding what works best for you and your life.