5 ways to curve spending

February 21, 2022

As a financial coach I have often hear the phase “I have a spending problem.” Which prompts me to ask additional questions such as what to do you mean? why do you think it is hard to stop spending etc. and some of the responses I received are ‘just can’t say no to the kids, or whenever I know I have money on me I just have to spend it.

Nothing is for free

Let’s start off by acknowledging that there is nothing for free. There is always a tradeoff and you have to be aware of those tradeoffs. For each purchase you make that is not essential you have to ask, what is it costing me. Is it costing me the ability to be financially secure in retirement? Is it costing me the ability to save up a significant down payment for a house? Is it costing me the ability to send the kids to camp? It is important to reflect and see how your spending habits are affecting your financial goals.

We often give ourselves peace of mind by saying it does not cost much but it does. If you look at the total cost over a month, quarter or year versus the cost of that particular transaction you may realize that those small purchases add up to a significant amount. I would challenge you to look at your bank statements and add up all the discretionary expenses to see what your number is month over month.

Ways to curve your spending habits

1. Set a budget and stick to it. Creating new habits does not happen overnight. You have to take small steps. Give yourself a stipend for the month within reason. Take that money out of the bank and use cash for your purchases. When the money is finish that is it, do not go back for more

2. Turn off notifications. If you know you are tempted by sales. Turn off the sale alerts, unsubscribe from emails, do not browse websites or go window shopping.

3. Change your thinking. Do not view limitations on spending as a penalty. Instead think of the what you and your family is gaining. Peace of mind, financial security, and control. Once you realize what you are gaining for this temporary sacrifice then you will be able to stay committed.

4. Take a no shopping week or month. Give your debit card a break. Make it miss you. This may be challenging but you may find it therapeutic or eye opening. Either way you will learn a lot about yourself.

5. Learn to say no or say it is not in the budget. Sometimes we have to tell ourselves, our kids, spouse, family and friends no. It is not in the budget. We might feel bad but it is necessary especially if you are over extending yourself. After a few times you will realize that your no muscle becomes stronger.

Look, I am not saying not to enjoy your money. What I am asking you, is to be honest with yourself especially if you are not in the best financial situation or if you are not where you would or feel you should be and ask your self why. What are you doing that is causing the life you envision or derailing the goals you are trying to reach? Once you are aware of what your money decisions are costing you then you can start making decisions to eliminate or reduce expenses and use that new found money to sure up your emergency fund, contribute to retirement account, pay down debt, safe for your kids’ college or bring your family on a vacation.

Have you cut spending and if you did how? leave a comment