8 Ways to Stop Overspending and Take Control of Your Money

Overspending can happen at all income levels and for many reasons. Taking control of your money puts you in a position of power, and it could lead to making more meaningful purchases in the future.

Understanding what causes overspending

Overspending can broadly be defined as spending more than you earn. 

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Sometimes, lack of income is the main issue. Households that live paycheck to paycheck and only have enough for the bare necessities could wind up overspending because of an unexpected car accident, medical emergency, or major life event, such as a family member’s wedding. 

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It’s a precarious situation that you might be able to address by increasing your income and building emergency savings over time. But there may also be systemic forces keeping you down, and you’re overspending to simply get by. 

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Other times, overspending comes from spending on wants rather than needs. That’s the type of overspending that you might be able to address more quickly. But often, you’ll need to understand the psychological triggers that lead to this overspending. 

Common triggers of overspending

Overspending might become a regular part of your life, or it could be an occasional response to a specific trigger. Either way, consider whether any of these common reasons people overspend ring true for you. 

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• Stress: A stressful day might lead someone to look for relief with retail therapy. It’s more about the process of shopping than what they buy. 
• Addiction: Overspending might be the result of a gambling addiction or substance use disorder.
• Consumerism: The general feeling of wanting more and thinking that buying products and services is a sign of success or happiness. 
• Lifestyle creep: No matter how much someone earns, their spending rises just as quickly. 
• Social pressures: Spending money to keep up with family, friends, colleagues, and strangers on social media. 
• Lack of awareness: Money seems to simply disappear throughout the month.

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If one (or several) of these triggers are leading you to overspend, you might be able to rein in your spending and take control of your money. 

8 ways to curb overspending

It might take a lot of self-reflection and discipline to curb overspending, but here are eight ideas you can try. 

1. Track your spending for a full month 

One of the first practices you can try is to track all your spending for the month. You could do this with a pen and paper, your phone, or a budgeting app that syncs with bank accounts and credit cards. 

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You’re not making a budget or figuring out how to stop spending money right now. The point is to simply observe and try to understand.

2. Define your personal values and find your financial archetype 

Changing spending habits isn’t just about numbers and financial goals. 

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Take time to reflect on your personal values and what brings you joy. More money might play a part in these, but there’s often a diminishing return to working and earning more in an attempt to find happiness. 

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You can also try to identify your money type or financial archetype, which might explain how you understand and interact with your finances. Lindsay Bryan-Podvin, a financial therapist, has a free quiz that could be a good place to start.  

3. Try to understand your spending 

With your values and money type in mind, go through your monthly expenses and examine each of your purchases: 

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• Did any triggers lead to spending that doesn’t align with your values or long-term goals?
• Are there any common things among your impulse purchases? 
• Do you regret any of the purchases?
• Do you feel great about any of the purchases?

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Everyone has unavoidable bills. But focus on the rest of your expenses and see if there’s anything you want to change next month. 

4. Consider all the options and trade-offs

One mental trap people fall into is making direct comparisons when deciding how to spend money. 

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For example, you might be trying to decide between two new cell phones. But you’re so focused on the pros and cons of each one that you don’t consider all your alternatives.

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Perhaps you could purchase a lightly used last-generation phone and use the savings to help pay for a vacation. Now, the decision isn’t phone A or phone B. It’s phone A/B or phone C and a vacation.  

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Try to take the same wide-lens view when reviewing your expenses and making purchases. 

5. Make spending more difficult

The further you get from feeling like you're spending money, the easier it is to spend without thinking. With this in mind, you might want to remove digital wallets from your phone or smartwatch and delete saved payment information in your browser.

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You don’t necessarily need to switch to cash for everything. Credit or debit cards might be necessary online and safer at stores. But making spending money more difficult than a single click or tap might stop impulse purchases that you’ll regret later.

6. Look for ways to save on monthly expenses

Take a few hours to review your recurring expenses for: 

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• Utilities
• Phone
• Internet
• Insurance
• Memberships
• Subscriptions
• Credit cards and loans

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It’s easy to set and forget certain expenses, but if you can lower your bills you’ll free up money for more meaningful purchases or savings goals. 

7. Work with a financial coach 

Getting a handle on your spending can be tricky on your own. Consider contacting a coach who can give you one-on-one financial advice based on your personal finances, feelings toward money, and goals. 

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The Association for Financial Counseling & Planning Education has a directory of coaches. Nonprofit credit counseling organizations also offer free or low-cost sessions with certified counselors to discuss budgeting, student loans, buying a home, credit card debt, and other common financial decisions. 

8. Meet with a therapist 

If you struggle to control your spending, or shopping in general, you may have a compulsive buying disorder (CBD). 

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Working with a licensed and certified financial therapist who has experience helping people address compulsive disorders may be the best approach. Even if you don’t think you have CBD, a financial therapist can help you explore the psychological underpinnings of how you handle money.

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If you’re struggling with gambling addiction or substance use disorder, some therapists can help. The National Problem Gambling Helpline (1-800-GAMBLER) and Substance Abuse and Mental Health Services Administration (1-800-662-HELP) websites and helplines could be good starting points. 

Improve your credit to give yourself options

For some people, access to credit can enable overspending. However, a good credit history and score can help you save money — even if you never borrow money. And if you have to get a loan or want to use a credit card, a good credit score can help you qualify for lower interest rates, fewer fees, and higher limits. 

‍Ava can help you build your credit so you can take control of your money and give yourself more options in the future.