The Real Reason You Overspend {& how to stop!}

The Real Reason You Overspend {& how to stop!}

I have heard from many of you that one of your toughest challenges is controlling your spending. Reader S. writes:

“I love your website because I am really passionate about being frugal and having financial peace and security.  My problem is that I try to keep a spending limit but “blow” it pretty regularly.

I am great at searching for bargains, do a lot of online shopping and use coupon codes. I know where each grocery item is the least expensive and I wait for sales and stock up. I don’t carry credit card balances and I am actually a money coach and help others with their budgets.

My problem is that I have small children and the things I need for them never ends. We are going on mini vacations to use up some time off that we will lose otherwise. I have found very inexpensive hotels which include great breakfasts and there are many inexpensive and free activities in the plans too but I need to buy activities for the car ride and disposable items. There are food items on sale that we really need but I would have rather waited until after the trip to buy but I would miss out on those deals if I did. 

All are necessary purchases! No frivolessness. And my son just grew and I need to buy clothes and shoes for him.

What tips can you give me? I so want to be uberfrugal and see my savings account grow exponentially but I get set back every month with these expenses that arise. “

First of all, I completely understand your dilemma. Did I tell you about the time I went into Target for a notebook and came out with $100 worth of dishes? Or that time I failed to make a meal plan and we had pizza delivered twice in one week? I could go on.

It’s so easy for me to spend money that I had not intended to spend and I can always find a reason to justify it.

“It’s a special event.”

“This item will never be on sale at this low price again.”

“I need to show him how much I appreciate him.”

“This appliance will save time and make my life easier.”

“I need a new lamp to match the sofa cushions I bought last week.”

“I want my daughter to feel beautiful.” 

None of these reasons for spending are necessarily bad but the truth is that we will always be able to find a reason to spend money. The primary reason we overspend is that we fail to keep in mind what is really important to us and make the difficult choice to give up some immediate pleasure for the sake of reaching those long term goals.

In spite of my past mistakes I have been able to seriously curb my overspending by making four changes in the way I think (and they will help you too!).

Realize That “Saving Money” Isn’t Always Saving Money

Advertisers and Retailers have co-opted the phrase “saving money” and used it to compel consumers to buy their products, but their use of the phrase really means “Spend less on what you’re purchasing”. I have often used the lie of “saving money” to excuse my overspending and make myself feel better.

The truth is frugal shopping strategies and purchasing items at lower than retail price only enables you to buy more for the same amount of money. You aren’t saving money unless you spend less and actually add the difference to your savings account. You can’t spend and save the same dollar, and spending usually wins out over saving because it’s so much easier and instantly gratifying. Of course you have the freedom to spend your money however you choose, but telling yourself that you are saving when you are spend just keeps you in a cycle of bad money decisions.

Be Honest With Yourself

Many times when we have difficulty with overspending it’s because we haven’t been honest with ourselves about our true desires and motivations. Shopping is often jokingly referred to as “retail therapy”, but the truth is that spending money makes us feel good and that “high” can become addictive if we aren’t aware of what is really going on in our lives. I know that I have used shopping to make myself feel better many times in the past.

Ask yourself if you are using shopping and spending money to cover up anger, hurt or depression about other areas in your life and seek help through counseling or a support group. Your overspending may be a symptom of a deeper issue.

Acknowledge Your True Needs

If you would like to win with money you will need to shift your mindset about what purchases are “needs”. There are few true necessities in life:

• FOOD and WATER: basic groceries (not restaurant meals), water to drink

• HOUSING: mortgage or rent

• UTILITIES: electricity, gas and water for your home

• TRANSPORTATION: gas for your car and basic insurance so you can get to work

• CLOTHING: basic clothing to last a few days, work clothing for your job

After these basic needs are met the remainder of our spending is discretionary and if we are honest with ourselves we have to acknowledge that most of our purchases are to make our lives more convenient or pleasurable not because we truly need something. When I take the time to consider if my purchase is truly a need I can more easily place the item back on the shelf and keep my money in my wallet.

Know What You Really Want

The primary way to save money rather than spending it is knowing what is truly important to you and making the hard choices for the sake of winning down the road. If you want to be able to stay home with your children, for example,  and you keep that goal in mind it’s much easier to pass up those new shoes or dinner out just because you’re tired.

I have to keep our long-term goals right in front of me on a daily basis or I blow the budget on a whim. I use sticky notes, my Debt Blaster Game (read more HERE) posted on the fridge and notes in my wallet to remind me of what is truly most important.

We always have a choice and choosing the postpone some of our purchases now enables us to achieve our true goals in life.

I’m not always successful at saving rather than spending but changing my mindset in these ways has truly helped to send us down the road to true financial freedom rather than living in a cycle of poverty and poor financial decisions. 

What about you? How do you keep yourself from overspending? Leave a comment. 🙂

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