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How to Stop Spending Money

No matter where or how we shop, spending money on random stuff is always a temptation. I’m looking at you, $100-Target-run-disguised-as-a-quick-trip-for-shampoo.

And don’t get me started on the aisles right next to the store’s checkout lane. Mini hand sanitizers, minty-fresh gum and that magazine with the latest news on the royal family? It seems they’ve thought of everything—or that’s what they want you to think.

With so many ways to shop (online, on our phones, and in the store), how can we avoid making mistakes that bust the budget? Don’t worry—I’m here to help you learn how to stop spending money so you can start actually winning with money.

5 Reasons You Can’t Stop Spending Money

Whether we like it or not, money makes the world go round. We spend money for so many reasons, and if we’re just a little honest with ourselves, a lot of those reasons can be chalked up to how we feel in the moment. And that’s where it gets a little dangerous—and can lead us to overspend.

Here are five main culprits to watch out for when it comes to spending money:

1. Social Media

Ahh, social media. I hate to love and love to hate social media. Picture this: It’s Saturday morning, and before you realize it, you’re scrolling through your social media feed to catch up on what your friends are up to. Not two swipes in, you’ve been bombarded with someone’s page and that new, life-changing kimono. And before your feet even hit the floor, you’ve spent $30, and life feels complete . . . for now.

If you’re honest, you probably didn’t have to work too hard to picture that scenario because you did it this morning. Let’s face it: We all want what we don’t have. And we want it because we think it will make life that much better.

But social media makes the comparison game even more intense. Your friend’s post about their brand-new couch with those perfect throw pillows makes your couch look like you picked it up off the side of the road. And that popular blogger’s post about the incredible, all-inclusive resort she went to makes your recent family vacation seem like a lousy trip to the state fair. When does it end?

News flash: It doesn’t. All of these things just drain your budget, rob from your future financial goals, and steal your joy.

2. Not Tracking Your Spending

It doesn’t matter how large (or small) your income is—if you’re not tracking your spending, you’ll never be in control of your money. In fact, you’ll always feel like your money owns you.

Listen: Living paycheck to paycheck is the pits. And if you’re always wondering where all your hard-earned money is going every month, it’s time to start tracking it . . . with a budget!

Stick with me, and I’ll show you how.

3. Shopping to Feel Better

Some people like to joke about spending money like a shopaholic, but compulsive spending, otherwise known as retail therapy, is a real thing.

For most of us, spending money on impulse just because we want it now is the problem. We see something and buy it before we think about what’s in the checking account (or before considering our financial goals, for that matter). Instant gratification isn’t all it’s cracked up to be. It doesn’t actually make you feel better . . . especially when you see your bank account shrinking right before your eyes.

4. Lack of Self-Awareness

If I had to choose one thing that’s made all the difference in my mindset around money, it’s gaining self-awareness. If I don’t continue to learn about myself and be aware of my money tendencies (I call them spendencies), it will be all too easy for an old habit or an “easy” out to creep in and ruin my progress.

You’ve got to know yourself well enough to know what you’ll be tempted by and what to guard yourself against. Are you naturally wired to be a spender or a saver? Are you a nerd or a free spirit? Do you value safety or status? Take my free quiz to discover why you handle money the way you do and learn how to break bad money habits for good.

5. Paying With Plastic

You might not have noticed, but you probably spend more when paying with plastic, whether that’s a credit card (who doesn’t love shopping with someone else’s money?) or a debit card. Think about it: When you’re shopping with plastic, it’s easy to spend more because you don’t physically see the money leaving your hand.


Start budgeting with EveryDollar today!

But when you spend with cash, you feel it. You feel those crisp (or wadded up) green bills leave your hand, and it hurts. Something inside of you cringes. Just moments before, you had money—and now? You don’t. So, the next time you make a purchase, pay in cash, and you’ll see exactly what I mean.

Here’s the good news: You can overcome these spending habits with a little planning, self-awareness and long-term thinking.

How to Stop Spending Money

Learning how to stop spending money is a real thing that anyone can master—that includes you! And no, I’m not going to tell you to just quit spending. I’m going to give you a step-by-step plan to help you get back in the driver’s seat when it comes to your finances.

All right, let’s get started:

1. Know what you’re spending money on.

Making and sticking to a budget every single month is what’s going to help you get out of debt and stay out of debt.

If this is your first time budgeting, you might be surprised by how much money you’re spending each week (or even each month) on little things, like coffee, lunches or that snack shop at work that your spouse doesn’t know about.

When you make your first budget, you need to make sure your basic needs (or your Four Walls) are covered. These are:

  • Food
  • Utilities
  • Shelter
  • Transportation

These are your necessities, and when you know your necessities, you know you can’t cut back in these areas. But anything that doesn’t fall into one of these Four Walls is fair game. No—you really don’t need to go out to dinner every single night. And as much as I love it, Netflix isn’t really a utility.

2. Make your budget work for you.

Ready to create your monthly spending plan? This is what I mean when I say budget. And my favorite kind of budget is a zero-based budget, which simply means that your income minus your expenses needs to equal zero—because you’ve told every single hard-earned dollar where to go. Just remember, it’s a working budget. You have to keep coming back to it in order to stay on track.

If this is your first budget, you’ll want to give yourself grace. It takes a few months to make your budget work for you. But if you’re an expert, take another look at your monthly expenses to find other ways to trim down your spending.

Use EveryDollar, our free budgeting app, to create your first budget in just 10 minutes. You’ll be able to plan your budget, track your spending, and monitor your debt and savings progress each month.

Save more. Spend better. Budget confidently.

Get EveryDollar: the free app that makes creating—and keeping—a budget simple. (Yes, please.)

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3. Shop with a goal in mind.

We’ve all been there. You’re out of shampoo and toothpaste. So with those two items in mind, you make a quick run to Target. But as soon as you walk through the door, you feel the gravitational pull toward the dollar spot and fill your basket with a bunch of those colorful cell phone chargers and water toys for the kids that you swear will get used all the time.

Thanks to a few seemingly harmless impulse buys, a quick trip to the store for two essentials just got pretty expensive.

Does anyone really plan on getting sidetracked while they’re out shopping for essentials? Probably not. But if you get caught in this scenario a lot, you might want to make a point to avoid the stores that make you spend too much money. Or maybe send your spouse in for you.  

4. Stop spending money at restaurants.

Changing how you spend money on food is one of the easiest ways to save money. And we all know that going out to eat gets expensive—fast. If you’re spending $15 on lunch four times a week, that’s $60 a week (and $240 a month)! Imagine how quickly you could pay off debt with that kind of money!

Consider this: Instead of heading into the grocery store and wandering up and down the aisles, create your meal plan for the week, make a list before you go, and then stick to it. If you need to leave the kids (or your spouse) at home to save even more, don’t think twice about it. Planning your meals in advance means lowering your overall food costs.

I’m not saying you shouldn’t ever treat yourself to Sunday brunch or a nice dinner on a special occasion—just cut back some and make sure it’s in the budget.

5. Resist sales.

Who doesn’t love a good deal? I know I do! Retailers know their customers, and they also know the irresistible pull of a flashy (and perfectly placed) sales rack. But how much is all this saving really costing you?

If you buy a sweater you were never going to buy just because it’s 25% off, you’re paying 75% more than you would have. (Preaching to myself here too.) Sorry, guys, that’s still called spending, not saving.

Again, you can avoid these shopping traps by making a list before you go. Then, practice some self-discipline once you’re there. If you see an item on sale that isn’t on your list, it wasn’t meant to be. And if you can’t stop thinking about it, add it to your budget for next month!

6. Swear off debt.

If you’re serious about learning how to stop spending money, you have to swear off debt—for good. After all, debt steals from your income. Not only that, but you’re also stuck paying on the loan or credit card (plus interest) until it’s gone. It’s true: Your debt owns you until you pay it off.

Think about it: If you go out to a nice dinner with your friends and pay for it with a credit card, you might as well just eat your next paycheck. If you forget to pay the bill on time, interest gets added, and that $20 meal just keeps getting more expensive. And you don’t have anything to show for it!

We live in a world where just about anything can be financed or borrowed, which can give you a sense of financial security. But it’s not real. It just makes you think that you can afford the payment, the new car, the house or the big purchase. Here’s the deal: If you don’t have the cash to pay for something right now, you can’t really afford it.

So, go ahead. Cancel your credit cards and commit to living debt-free from this moment forward. And just as a refresher: Credit is an enabler. It enables you to spend money you don’t even have. But without credit, overspending isn’t even an option. You can only spend what you have.

7. Delay gratification.

If you’re having trouble sticking to your new budget and shopping list, imagine how you’ll be using that must-have item a month from now.

Will that sweater still look good after a few washes? Will your kids still be playing with that overpriced toy set? Will those cheap shoes last through the entire season?

Most of the time, the answer is: Put it back. But what if you still want it? Then you wait. Work it into next month’s budget and revisit your feelings in 30 days. If you still love it, you’ll be able to buy it without the guilt because it’s already in the budget.

8. Challenge yourself to reach your new goals.

Ready to put your willpower to the test? Buy just the bare necessities for one month. You’ll be amazed by how little you actually need.

You’ll also be able to identify the things you don’t necessarily need but would simply like to have. Do you like using your gym membership because it helps you stay active? Keep it. Does your weekly visit to the chiropractor keep your back in tip-top shape? Keep going. If it fits into your budget (and doesn’t cause you to go into debt), spending money isn’t an issue.

The key to stop spending too much money is to create better money habits in your daily life. But I know that’s easier said than done. That’s why I wrote my book Know Yourself, Know Your Money. In this book, I show you how to make lasting change so you can make actual progress with your money like never before. And I also talk more about finding your money mindset and learning how to create healthy money habits for the future. Grab your copy today!

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Rachel Cruze

About the author

Rachel Cruze

Rachel Cruze is a #1 New York Times bestselling author, financial expert, host of The Rachel Cruze Show, and co-host of Smart Money Happy Hour. Rachel writes and speaks on personal finance, budgeting, investing and money trends. As a co-host of The Ramsey Show, America’s second-largest talk radio show, Rachel reaches millions of weekly listeners with her personal finance advice. She’s appeared on Good Morning America and Fox News and been featured in TIME, REAL SIMPLE and Women’s Health, among others. Through her shows, books, syndicated columns and speaking events, Rachel shares fun, practical ways to take control of your money and create a life you love. Learn More.

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