March 9, 2023

How to Stop Overspending and Start Saving: A Practical Guide

Are you tired of living paycheck to paycheck and constantly feeling like your money disappears as soon as you get it? Do you find yourself overspending on things you don't really need, but just can't seem to resist? It's time to take control of your money, start saving for a better future and live a debt-free life.

In this article, we’ll share tips on how to stop overspending and develop healthy habits that will lead to long-term financial stability. Get ready to say goodbye to overspending and hello to a healthy savings account!

Common Triggers for Overspending

If you're struggling to keep your finances in check, it's crucial to understand why you're overspending in the first place.

Here are some common triggers that may lead to overspending─this list will help you identify the roots of your problem so you can take steps to avoid them and improve your financial health.

1. “Keeping Up With the Joneses” Mentality

It's natural to want to fit in with your peers and feel accepted, but sometimes that can lead to overspending.

We may feel like we need to have the latest gadgets, clothes, or accessories to be perceived as successful or 'cool'. This pressure can be even stronger if you live in a community or social circle that values material possessions highly.

2. Lifestyle Inflation

As we earn more money, our spending habits increase as well. We may start to upgrade our living situation, buy more expensive cars or clothes, or take more extravagant vacations. This is often referred to as "lifestyle inflation," and can be challenging to avoid as our income grows.

3. FOMO (Fear of Missing Out)

Social media platforms can make it feel like everyone is always doing something exciting or purchasing the latest products.

This creates the need to keep up with friends or the influencers we follow online, in order to feel like we're not missing out on anything.

4. Emotional Spending

Some people turn to shopping as a way to cope with stress, anxiety, or other difficult emotions. It can be easy to justify purchases in the moment, but the long-term consequences of overspending can be detrimental to our financial well-being.

5. Lack of Financial Literacy

Many people overspend simply because they don't have a good understanding of their financial situation or how to manage money effectively.

Without basic financial literacy skills, it can be challenging to create a budget, set financial goals, and make informed decisions about spending and saving.

Practical Strategies for Cutting Back and Saving Money

We've all overspent at some point in our lives. Maybe we were either new to adulting, or we just gave in to the lure of consumerism.

Overspending is a common problem that can lead to financial stress and instability. Luckily, there are practical strategies you can use to curb your spending and build healthy financial habits for the long term.

1. Create a Budget and Track Your Expenses

Creating a budget and tracking your expenses can be a total game-changer. Once you know where your money is going, you can figure out which areas you're overspending in and make some changes.

Maybe you'll start cooking at home more often or find some free activities to do with friends instead of always going out.

2. Automate Your Savings and Setting Goals

Automatic transfers to a savings account or a savings app that rounds up your purchases to the nearest dollar and saves the difference can be a great way to save without even thinking about it.

And when you have specific and realistic savings goals in mind, it can be a lot easier to stay motivated and stay on track. Maybe you're saving up for an emergency fund, a down payment on a house, or that dream vacation you've always wanted - whatever it is, make it happen!

3. Cut Back on Unnecessary Expenses

Another great way to cut back is by avoiding unnecessary expenses. We've all been there: scrolling through our favorite online store and suddenly there's a sale on something we don't really need.

Instead of giving in to the temptation, remind yourself of your savings goals and priorities. This way, you can save more and spend less.

4. Use Cash Instead of Credit Cards

When you use cash, you can physically see how much money you have left, which can be a good reminder to stick to your budget.

Credit cards can make it easy to overspend and accumulate debt, so if you struggle with impulse purchases, switching to cash might be a good strategy for you.

5. Find Ways to Increase Your Income

If you want to boost your savings and enjoy a little extra financial breathing room, increasing your income is key. You could start a side hustle, sell items you no longer need or want, or even negotiate a raise at work.

6. Make Small Changes to Your Daily Habits

Developing healthy financial habits can add up to big savings over time and help you avoid falling into debt. For example, you might start bringing your own coffee to work instead of buying it every day, or start using a reusable water bottle instead of constantly buying plastic ones.

Small changes like these might not seem like a big deal on their own, but they can make a big difference when it comes to your overall spending and saving habits.

7. Change Your Mindset About Money

Your mindset about money can have a big impact on your spending habits and financial well-being.

Rather than seeing money as something to spend and enjoy in the moment, try to shift your perspective to see it as a tool for achieving your long-term goals and building a secure future.

This can help you make more intentional decisions about your spending and prioritize your savings goals.

8. Learn to Enjoy Simple Pleasures

You don't need to spend a lot of money to have fun or enjoy life! Whether it's taking a walk in nature, spending time with loved ones, or practicing a hobby, finding joy in the simple things can help you reduce unnecessary spending and focus on building your savings.

9. Build a Financial Plan

Building a financial plan can help you make informed decisions, prioritize spending, and work toward long-term financial stability.

It involves assessing your current financial situation, learning how to set financial goals, and developing a plan to reach those goals. This may include budgeting, saving, investing, and managing debt. Regular review and updates are important to keep it relevant and aligned with your changing financial circumstances.

10. Seek Professional Financial Advice and Resources

If you're struggling with overspending and are feeling overwhelmed by your finances, seeking professional assistance can be a great way to get back on track.

From consulting with a financial advisor and attending financial workshops, to reading books on personal finance—there are numerous resources available to help you build healthy financial habits. Don't be afraid to ask for help!

11. Have an Accountability Partner

Learning how to stop overspending is just one step, but having an accountability partner can go a long way. It can be a friend, family member, or even a financial advisor. They hold you accountable when you're tempted to overspend, and offer alternative solutions or help you find ways to cut back on expenses.

They can also provide support and motivation, making the journey of achieving your goals less intimidating and more enjoyable.

Earnin Helps You Manage Your Money

Ready to stop feeling like you're stuck in a never-ending cycle of overspending and struggling to save? Then it's time to take charge of your financial situation and pave the way to a brighter future.

One of the tools that can help you manage your money is EarnIn. This innovative app allows you to access your earned cash before payday, so you don't have to rely on credit cards or other forms of debt to get by.`

With up to $100 of your pay per day and $750 per pay period available for transfer, you can have the cash you need and plan ahead.

And, if you struggle with setting money aside regularly, EarnIn's Tip Yourself feature is a game-changer. By rewarding yourself every time you achieve a personal goal (like not overspending), you can finally start building up those savings.
Don't wait any longer to take control of your finances—download EarnIn today!

*1. Subject to your available earnings, Daily Max and Pay Period Max. Restrictions and/or third party fees may apply. *

2. Tip Yourself Account funds are held with Evolve Bank & Trust, member FDIC and FDIC insured up to $250,000. Tip Yourself is a 0% Annual Percentage Yield and $0 monthly fee service. Your Tip Yourself Account and any Tip Jars are not Savings Accounts. For more information/details visit https://www.earnin.com/privacyandterms.