How to Stop Overspending

Everyone who keeps a budget overspends once in a while.  Even the most disciplined spender occasionally makes a purchase that wasn’t in the budget at the beginning of the month.  Doing this once in a blue moon won’t completely wreck your financial future; however, if you habitually overspend, it can prevent you from reaching your financial goals or aspirations.


Psychologists say that most chronic over-spenders use spending as a form of self-medication.  They may view buying things as a way to alleviate sadness, boost self-esteem, or relieve stress.  But whatever comfort these impulse purchases provide rarely lasts more than a minute or two, so allowing yourself “comfort purchases” can be a slippery slope that leads to even more overspending. 


If this is a problem you often have, you can combat the urge to splurge by asking yourself the right questions, and if necessary, putting a buffer between your impulse to buy something and actually buying it.


Strategies to fight the urge


Before you add that shiny new thing to your cart, ask yourself, “How am I feeling right now – bored?  Sad?  Irritated?”  This will help you understand why you want to buy something in the first place. 


Then ask, “If I think about it rationally, do I actually need this?”  If the answer isn’t an immediate yes, put it back.


If you’re still struggling, ask:

  • Where will I put this item?  Will it fit in my life? 
  • How long will this make me feel better? 
  • Am I going to feel worse at some point if I spend this money?


The time it takes to ask and answer these questions may take care of these urges; they often pass in a minute or two.  If you need an even bigger buffer, institute a 24-hour wait rule for purchases.  If you still feel like you need it tomorrow, you can come back and get it.


None of these strategies will eliminate the spending impulses you get, but they can help you avoid their most destructive consequences.


-Marshall Rathmell-


Marshall Rathmell

Marshall Rathmell

Marshall Rathmell CFP®, CPA/PFS is the CEO, Shareholder and Financial Planner with BCR Wealth Strategies.