Do you have a spending problem? I do. The thing is, it’s not always easy to recognize a spending problem. Some of us have one and don’t even realize it.
That’s because being human means that it’s hard for us to see our own issues — even if they’re things that might be obvious to an outsider.
So before we get into possible ways to overcome a spending problem, let’s talk about how to identify one.
It’s broader than that. The good news is, it doesn’t have to stop you from getting out of debt or reaching your financial goals.
Signs of a spending problem
So how do you know when you have a spending problem? The most obvious signs show up in your finances.
You probably have a spending problem if you should have more than enough money each month to pay all of your bills but:
- You’re living paycheck to paycheck, spending all of your money before your next payday comes
- You’re living beyond your means (meaning you’re using credit or loans to buy things because you don’t have the cash right now — even though you know how to budget)
- You don’t know how much money you owe on your credit cards, and don’t remember what you bought with them
- You’re only making minimum payments on your debts, even though in theory you should be able to send extra toward at least one of them
- When you do add up how much you’ve spent, you’re surprised at the total
- You’re not meeting your financial goals due to overspending
- You have any of the signs of a compulsive shopper or a spending addiction
Did you recognize yourself anywhere on the list?
If so, that’s a step in the right direction. You can’t fix what you don’t know is broken, so recognizing that you have a spending problem is the very first step toward making a change.
While I’m no longer in debt, and I do have money in savings and am setting aside money for retirement each month, I am still regularly surprised at how much I’ve spent. And I don’t like how much I’ve spent.
So I’ve still got issues in that area — mainly due to impulsiveness & boredom. But, I’ve managed to overcome the worst of it, and it’s no longer causing problems with my money. Chances are you can do the same.
How to overcome a spending problem
Here are some ways to overcome a spending problem. (Of course, if you have an addiction or a compulsion, get help from a competent mental health professional.)
It starts with recognizing that you have a spending problem, and then takes a little digging. See if it manifests itself in impulsiveness, in particular areas, or if it’s more generalized.
That way you can decide what actions might help you most. Let’s start with impulse buys first, since many spending problems are related to those.
If your spending problem is related to impulse buys…
Impulse buys are huge causes of overspending. You see something cool that you just have to have (even though you didn’t want it at all 5 minutes ago).
Or you get bored and want to go do something. You know, something fun like going out to eat, to the movies, to the mall, on a trip, or whatever.
If you know that you’re like that (and I am) set up a system to protect you from yourself:
How to stop yourself from overspending on impulse buys
To get your spending problem in check in this case, try the following:
1. Create a checklist to use before spending money.
Keep the list with you, and get in the habit of referring to it before spending money. For example, your checklist could have items like this on it:
- Is this a planned purchase?
- Did I want this before I heard or saw an ad for it?
- Do I have the money for it already?
- If I buy this, will I still be able to buy or do the other things I need and want?
- Do I have an item like this already or I have I done something similar recently?
- How many times per month will I use this?
- Could I borrow this from someone instead?
- Can I wait to buy this next week?
Just answering those questions will slow you down and start the thought process. If you still want the item after that, commit to waiting at least 24 hours before you spend the money. (Even if you’re happy with all of your checklist answers.)
2. Enlist the help of a family member or friend.
Find someone who will hear you out and then tell you no and talk you down. This should be someone who can also remind you of your real goals (whatever those might be.) Then call that person whenever the unplanned urge to spend comes on. Make sure they know you asked them to remind you of what you said you’d rather be doing with your money.
3. Set up an automated savings plan.
If you’re just not saving enough because you spend first, set up an automated savings plan. You can do this a couple of ways. If your workplace offers direct deposit, have a set amount each paycheck sent to a (hard to access) savings account. Or you can set up an automatic transfer to savings that goes into effect ASAP each time your paycheck makes it into your checking account. Note: If you find yourself constantly transferring from savings to checking despite this plan, definitely work on your budget.
Of course, you can also work on whatever might be behind your problem with impulse spending. (For me having ADHD plays a big part.)
If your spending problem shows up only in specific areas
If you’re spending problem only shows up in specific areas, look to see what’s behind it. Then challenge yourself to fix the underlying issue.
There are three specific areas that I’ve noticed people often mention as problem areas, so I’ll cover those here next.
If you’re spending too much money eating out
You might find that you’re spending way too much money eating out. Think about why you’re doing that.
Do you hate to cook? Are you bored? Do you think that you have too much to do? Do you like to spend time with family & friends, and are meals out the way you normally do that?
Make your own list of why you eat out a lot, and then think of possible solutions.
Some ideas to change things might be taking up a new (less expensive!) hobby, get another family member to do the cooking, eliminate 20 minutes of TV or computer time per day to give yourself more time to cook, notice that it actually takes longer to drive somewhere and eat out vs cooking at home, set a specific amount to spend each month on meals out, eat less expensive places, get water instead of buying drinks, etc.
If you spend too much on the kids
Or maybe you’re spending too much money on child-related expenses such as clothes, toys, and activities. Again, step back and take a realistic look at what you’re doing, and why you might be doing it.
Do the kids or grandkids really need new clothes on a monthly basis? Are their rooms overflowing with things to do? Is their schedule packed? Are you trying to show your love because you want them to have whatever they desire?
Set limits for yourself ($40 on clothes per month, for example, or one activity per child) and then follow them. Also, know that while a child may say (and truly feel) that they want the latest must-have item, chances are they will not even remember those things when they grow up. Unless they never get any of them of course, which would not be the problem in this case.
What they WILL remember is the time you spent with them. Running errands with them, talking or texting with them online, even getting physical letters from you or spending time at your house. Think back to your own childhood. Is it THINGS that you remember, or people? Know that you can show your love AND still reach your financial goals. While being a good role model for money.
If you only spend too much when you do certain things…
This is related to impulse buys, which I talk about above, but it can be more specific too IF the only time you only spend more than you intend is when you do certain things.
For example, maybe you only overspend when you:
- See an ad online
- Get a catalog in the mail or a coupon in your email
- Go to the hundred dollar store (aka Target)
In those cases, the solution is pretty simple. Install an ad blocker, cancel the catalogs you’re already getting and get on the do mail list, unsubscribe from the offer emails, and avoid the stores that trigger you.
You will save a WHOLE lot more by not buying than you ever would by spending on “deals”.
If your spending problem is more generalized
If you tend to overspend in many areas, strangely enough that may actually be easiest of all to resolve.
Chances are you need to start tracking your spending, for starters. (At least use something like Mint if the thought of doing it yourself with a piece of paper makes you shudder.)
Then LOOK at your spending regularly. Daily at first, in fact. NOT at the end of the month. The purpose of looking at your spending is not to beat yourself up or feel bad. It’s to decide whether or not you got enough value, or would have rather used the money for a bigger goal instead.
It sounds simple, but “just” paying attention can make a huge difference. You’ll have a whole lot more of those “wow I spent more than I meant to” moments. That will give you more opportunities to stop the spending on the things that don’t matter to you.
Ideally, you’ll also want to set up a spending plan. Knowing what you want to spend your money on will help you to say no to those spur-of-the-moment things that aren’t on your list. Budgeting really is your friend.
Success with overcoming your spending problem is possible
Once you begin to experience some success, you’ll start to see the benefits of getting your spending problem under control, and you’ll likely get better and better at it.
The important thing is to keep at it, and to get help if you need it or continue to struggle. You CAN overcome your problem with spending!