Do you find yourself accumulating a bigger balance on your credit card every month? Are your closets and cabinets overflowing because you keep buying things you don’t need? Do you take a nervous look at your bank account balance a few days before each paycheck and wonder where all your money went?
Yes? You might have an overspending habit. Overspending can keep you from reaching your financial goals. The good news? There’s a cure.
TIPS TO BREAK BAD SPENDING HABITS
Get on the same page with your significant other. Be open about your spending habits and resolve to work together to stay on budget.
Track your spending. It is hard to solve a problem if you don’t know it exists. Keep a log of all spending for a month. Note what you bought and how much it cost. At the end of the month, add up the total you spent by category. You may be shocked to learn how much you are spending on clothes, gadgets, gifts or other items.
TIP: Digital banking tools make tracking your spending even easier.
Set a goal. How would you rather be spending your money? Do you want to pay off a credit card? Take a trip? Or save for a home? Once you set your sights on a specific goal, it is easier to cure your overspending habit. Remind yourself that every dollar you spend elsewhere, takes a dollar away from your goal.
Create a budget. It’s still okay to spend, but you should plan to spend. Set a budget for each spending category each month.
Use cash. Swiping a card makes spending even easier. Once you have a budgeted spending allowance, withdraw this money in cash and put it in a special place, like an envelope or a designated coin pouch. When the cash runs out, don't spend any more on that type of purchase until your next paycheck.
Seek out support. Be honest about your spending habits and goals. When you have a friend who is understanding – or even trying to reach a similar goal - you can find inexpensive ways to spend and save, together.
Updated August 2023
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.