Usually overspending is a sign of feeling out of control with your finances. I ask three questions before someone accesses the Debt Free Millennials Facebook Group. One of those questions is, “What is the biggest thing you are struggling with financially?” One of the answers included, “spending more than I make.” Another answer was, “feeling so far behind on my money goals.” A third answer was, “living paycheck to paycheck.”
Overspending can get messy. It can make us feel guilty or shameful. I’m going to cover how to stop spending more than you make so you can start living a debt free life.
Reduce overspending by tracking your monthly income and expenses
The very first thing you need to do to stop overspending is to track your income and expenses. You can track your income and expenses by using a spreadsheet. You can also use a whiteboard, pencil and paper, or a money-tracking app. Find a way that you like to track and use it!
Before I started tracking my monthly income and expenses, I thought I knew how much I was spending. For example, I thought I spent around $80 per month on gas. After I started tracking this expense, it turns out I was spending $165 per month on gas! I was overspending twice as much as I thought.
If you have never budgeted before, try tracking one thing, like how often you spend money on gas. Every time you go to the gas station, write down or record the total. Then, at the end of the month, add up the costs. It may be different than what you thought.
Cut the fluff to stop overspending
After you record your income and expenses, it’s time to cut the fluff. And by fluff, I mean all the extra things you keep saying, “yes” to. Off the top of your head, what are two things that you can say no to?
You have to tell yourself, “I am not saying no forever, I’m saying no right now.” When you say no, you actually give yourself permission to let go of any guilt or fear you might feel.
What things can I get rid of from my budget?
You might be asking yourself how you can stop overspending by getting rid of things from your budget. I had this conversation with one of my Budget Bootcamp students. There was fear about giving something up because there was emotional value tied to it.
For example, let’s say you enjoy giving money towards saving the pandas. You love pandas. You have a panda T-shirt and they are the first animal you visit at the zoo. So, you want to help by contributing to a nonprofit each month.
But the truth is, you are overspending. And putting yourself into potential debt or living off of savings isn’t going to help you help the pandas. Instead, you could support the pandas by donating your time. Post on social media about pandas. Bring awareness to your community. Volunteer at the next zoo event. These are ways that you can still contribute without sacrificing your budget.
Aside from emotional purchases, you could also temporarily say no to self-care indulgences. Self-care indulgences are anything that are considered wants, not needs. Getting your nails done is a want. Putting food on the table is a need. Buying tickets to a Garth Brooks concert is a want. Paying the electricity bill is a need.
Look for those “want” categories in your budget and see how you can spend less or cut altogether.
Replace spending with contentment
The next thing you can do to control your spending is to replace it with contentment. Contentment comes from finding joy in things or experiences that money can’t buy.
“But Target makes me so happy. Starbucks makes me so happy.”
Does it? A lot of people get tripped up with confusing spending with happiness. I’ve talked about this on my Materialism and Millennials: I Got Sucked Into It video. When you replace contentment with spending, you are ignoring your core values. Your core values are what make you, you!
How to find contentment to stop overspending
Think about all the intangibles that create you. I enjoy writing, reading, connecting with God, and exploring nature. Cooking is also one of them. I also love music and connecting with my friends and family. These are the intangibles that make me feel content. If I don’t have that, I have discontentment. I get contentment confused all the time by trying to locate it in material goods.
Try listing out three to five things that bring you joy and doesn’t cost money. It could be as simple as watching a Disney movie or FaceTiming a friend. Start incorporating at least one contentment activity per week. You will see that your spending will lessen and your joy will grow.
True story: I got obsessed with the idea of laser hair removal and wanted to get it done at a salon. I thought that by getting laser hair removal I could solve my problem of shaving and save myself time. The truth is, buying this kind of treatment isn’t going to make me happier. In the moment it feels nice, but 10 months from now will I be upset if I didn’t get this? No! I can be as content with using a $10 razor and some tweezers and put that money towards something I value.