How to eliminate over spending

Knowing how to stop spending money has to do with identifying the emotional and psychological triggers that cause us to spend. If you remove those triggers, you will remove the temptation and opportunity to overspend. There are many reasons why we overspend. It could be because we are not aware of our true spending habits. Maybe we are calculating our income, expenses, debt payments and spending incorrectly. Then in the end our bank account balance dips lower than what we expect. Whatever the reason, you can take control of your finances and keep your spending in check.

Spending is often emotional, moody money. People spend more when they are sad, lonely or depressed. You shop to try to feel better, by substituting a positive feeling, getting something you want for the negative feelings. But, the spending will eventually make you feel worse, when you have to pay the bills.
Now that you know how much you are spending, you can think about ways to cut your spending. The first step to knowing how to work on spending too much is identifying the reasons why you spend too much money. Understanding the reasons why you spend too much money can help you take steps to reduce over- spending. Recognize that you have a problem. Uncontrolled spending is like throwing away money. Some signs of a spending problem include: You run out of money toward the end of the month. You spend more than you earn. You have negative net worth, where your total debt exceeds your assets. Your monthly rent or mortgage payments is greater than one third of your take-home pay. You have to choose which bills you will pay this month and which you won’t. You are getting deeper and deeper into debt.
There are practical and psychological ways to work on reducing over spending. Track Your Spending. Tracking your expenses is the key to not spending much, because it keeps you accountable for every penny you are spending. Once you are aware of where your money is going, you will be in a better position to make smarter spending choices and to identify areas you can cut back in. Start by tracking the bigger expenses and pay attention to those small, daily purchases.

Check your account statements. Categorize your expenses. Use a budgeting or expense-tracking app. Identify room for change.
Increasing awareness of spending is the key to exercising restraint. Create a descriptive budget, in which you track your spending for at least a month. Unlike a restrictive budget, which limits how much you can spend, a descriptive budget just tells you how much you are spending and on what. Get receipts for every purchase. If a receipt is not available, such as a purchase from a vending machine, write down the date, amount and description of what you purchased. Each night, transcribe this information in a spreadsheet or software like Quicken or Mint.com.
Be realistic about whether an expense is mandatory. Mandatory expenses are ones where you will die or go to jail if you do not spend the money. Mobile phones and cable TV are discretionary, not mandatory. At the end of each month, total up your spending in each category and tag. Just knowing how much you spent on eating out or paid entertainment will subtly shift your spending patterns. Calculating the total discretionary spending will also help you free up cash for savings or other necessary expenses.
Stick to Cash and Stop Relying on Credit Cards. The downside of credit cards is the ease with which you can overspend; when we are nonchalantly handing over our card to make a purchase, we are often not aware of how much everything will add up at the end of the month.
With cash, you physically see how much you have, and how much of your funds are diminishing with each purchase. By paying only in cash, you are forcing yourself to only spend what you have.

Based on your budget, take out some cash at the start off the week and put it in an envelope, which will act as your ATM for the week. Draw out a few bills here and there to cover your purchases, and if you find yourself running low on cash, you will have to figure out a way to make your money stretch. By paying with cash, you will learn how to stop relying on credit and you’ll know how to stop spending money you don’t have. The cash envelope system will also encourage you to become more creative and resourceful.
If you are an online shopper, having your credit card information saved onto your shopping profile certainly is convenient, but it is also easier to fall prey to impulse purchases. If you already know your credit card numbers off by heart, cancel your current cards and request new ones. Then, go through your favorite shopping accounts and remove your saved information so you can avoid the temptation of purchasing with a single click. Unless you know for certain you are going to buy something using the card and you have a plan to pay it off, there is no need to take your credit cards with you. By doing this, you avoid the temptation of using the card for a spur of the moment purchase, which is often the fastest way to find yourself in debt.
Eliminate unnecessary expenses. Reduce sporadic spending on clothing, entertainment and eating out. Live a frugal lifestyle. Do not eat out or participate in paid entertainment unless someone else is paying. Cut recurring expenses. Cutting a bill that you pay every month will save you money on an ongoing basis, not just a one-time saving. Consider cutting subscriptions and memberships, such as magazine subscriptions and gym membership. Also, ask for a discount. When you are buying a big-ticket item, such as an appliance, ask the store manager to knock 10% off the price and provide free delivery and installation. Most department store managers have the authority to approve such discount and many more.

The more you save, the less you spend. Add barriers to spending. Distract yourself from spending. When you feel like shopping, stop the temptation by doing something else. For example, instead of driving to the mall, drive to a local park or public library. When you are at home at your computer, get up to walk around the apartment and do some chores. Shift the impulse into a more positive direction.

By proactively deciding what you want your money to do and where it should go, your financial awareness increases. And, having that awareness goes a long way in helping you make smarter financial choices. Learning How to Stop Spending Money is Hard, But It Is Possible. It takes time and dedication to stop overspending and to reform your spending habits, and every now and then the urge to swipe your card will rear its ugly head. This happens to all of us, so don’t be hard on yourself; no one can completely reform their bad habits overnight. Once you know how to budget and you set some goals and safeguards in place, in time you’ll become a savvy consumer who knows how to stop spending money and use it wisely instead.