Last summer, I wrote a post titled, “Stop lying, 5 ways to stop overspending.” It has been one of my most popular posts. So I’ve decided to revisit the topic and expand the list.
#1 Get rid of disposable money
Financial Samurai say, “The very best way to stop overspending is to “go broke” by always flushing absolutely all disposable income after expenses out of your checking account and into a different bank. The money must be flushed out in the first several days once the money is deposited, preferably automatically. Clearly you must figure out your expenses beforehand. Once you do, and go broke every paycheck, you’ll be controlling your spending and saving in no time!”
#2 Challenge yourself to reduce spending in specific areas
Sit down with your spouse and list the top three categories where you overspend. Then create a list of ideas on how you can reduce spending. For example, if you find yourself dining out too often, then create a list of inexpensive or free date night activities (e.g. picnic at the park and a free museum). Over the next month, work on changing your habits in those three areas. The next month, rinse and repeat.
#3 Surround yourself with frugal-minded people
Phil at PTMoney.com suggests, “Surround yourself with frugal-minded people. It’s easy to avoid having to keep up with the Joneses if you aren’t spending your time with them. Hang out with people who inspire you to be efficient with your money, and who know you don’t need to spend a ton to have a good time. It also doesn’t hurt to have a thrifty spouse. I’m lucky in that my wife is much cheaper than I am. She motivates me to spend less. My advice to the single people out there is to look for a spouse who knows how to spend wisely.”
#4 Go to bed already and stop buying stuff
Besides getting more sleep, you’ll avoid wasting electricity watching TV and you’ll avoid falling into infomercial traps. I sometimes can’t believe what they are selling on TV, but someone is buying. I can’t count how many times I’ve never called and ordered Ronco knives. Fortunately, I always realize at the last second that the knives I have work just fine.
#5 Two words: Duct tape
Len Penzo just posted a list of 4 Ways duct tape can fix your Personal Finances. Here’s an excerpt to make you salivate, “Believe it or not for the past ten years Duck Brand duct tape has held an annual contest known as Stuck at the Prom where they give away college scholarships to high school prom couples who are judged to have created the best prom attire made entirely of duct tape. I’m not kidding.”
#6 Put a picture in your wallet over your debit or credit card
I sold security systems the summer before I married my sweetheart. To help push everyone through the last two months of the summer, we all listed how much we wanted to earn by the end of the summer and what we wanted to do or buy with that money. The next day, our manager’s wife had printed out our names, how much we wanted to earn, and a picture of our reward. We saw those images everyday before we began knocking doors.
Try putting a picture of what you are saving for in your wallet so each time you go to spend money, you have an image staring you in the face as a reminder to put your wallet or purse away and go home.
Conclusion: Try something
Each of the suggestions above has the potential to help you stop overspending. But none of them will work unless you try something. Don’t worry about getting it all right immediately. So pick a method from above and go at it with all the energy you can muster.
Also, let others know what has or hasn’t worked for you in the comments below. Thanks!