Do you have a habit of spending more than you want to? Do you wish to know the secret to spend less? And do you think that it is impossible for any article to help you spend less? Well, welcome to our article which is going to help you overcome your habit of spending more money, and that too with ease. I hope you will send a sweet little mail to us after some time thanking us for helping you solve the mystery – How to stop spending money unnecessarily?
Where to begin to stop?
You can be an extreme thinker and can say that from now on wards I will live a life of a monk. I will not need any money and hence will not even need to spend even a single dime. But being a monk is out of the scope of this post. J However, being a wise spender is what we will teach you. And guess what, we have a detailed list created for you. Let’s check this out –
10 Most important ways which answer – How to stop spending money?
1) Knowing your current worth and spending habits is the key
It is important to know your current net worth and how you are already managing it. It will be better if you break down this information into the following three important parts –
i) How much money I currently have.
ii) What is my average monthly income?
iii) What is my current average monthly spending?
It is very important to know what you already have and in what quantity. Second important thing is to know how much you can earn in a given period. It can be zero income as well. But knowing that is important. Lastly, but importantly, you need to know your spending habits. If you have an answer for each of the above three questions, you have already come halfway in controlling your money flow.
2) Don’t avoid Non-avoidable expenses
Everyone has a list of unavoidable expenses. You too must be having some. These include –
i) Apartment Rent
ii) Phone, electricity, and other utility bills
iii) Transport
iv) Grocery
v) Medical Expenses
vi)Insurance
vii) School/College fees of yourself or your children
viii) Other important items that you can’t live without.
Ensure that you create this list of items you can’t live without. Analyze this list again and keep only the non-avoidable expenses in this list. Anything that is avoidable must not make an entry to this list.
You got the list, what next?
Once you complete this activity, you know the expenses that you have to bear month on month. So, you must ensure to park this amount somewhere at the beginning of each month. This will enable at least the basic lifestyle for you. If you don’t have money for this list, you need to stop reading this article and first focus on finding out ways to arrange at least this amount each month. If you earn more than this each month, you are good to go ahead.
3) Where does the money flow?
Now that you know your income and your necessary spending details, you need to identify all the other money outflows. These may include –
i) Online shopping
ii) Offline shopping
iii) Party with friends
iv) Online food orders
v) Hobby spending
vi) Vacations
vii) All other major expenses
We are not talking about keeping track of each penny you spend. But what we are concerned about is identifying your spending habits. You need to identify your top 10 spending habits which do not come under essential spending. Also, you need not be absolutely correct in calculating these expenses. You just need to check the last 3-4 months and get an approximate amount of money you would have spent on these list items.
Once you have the list ready, you will be able to easily identify which item is digging a hole in your pocket. It is never good to stop spending money on these items because these are some things that you like. You just need to cut down some expenses here. How to stop spending money in such scenarios? Let us see that –
4) Impulse spending? Ask yourself each time – How to stop spending money?
Most of the unwanted spending is impulse spending. If I take a vote from 100 spenders, 75+ will agree that they often get in the trap of impulse spending. Be it a clubbed offer, or an exclusive deal, they just can’t resist the temptation to grab it.
Impulse spending is never good and is the most hazardous to anyone’s budget. Next time you feel like buying impulsively, especially due to some discount or offer, pause and ask yourself these 3 questions-
i) If this deal/discount is valid for 1 year, then do I need to buy it today?
ii) If there is no offer on this item, will I still buy it?
iii) What if I buy this now and lose it later? Will I buy it again?
If the answer to any of the above three questions is NO, you DON’T need to buy that item. It is just an impulse buying thought which the product company, the seller, or the e-commerce company plants in your mind. You better leave it there and save your bucks.
5) Savings are the savior
Who has not heard about the phrase – An Apple a day keeps the doctor away
Well, savings are the apples of your life. You need to indulge in a habit of saving on a daily basis. When you save on a daily basis, you know that you are working on a cause – the need to improve your financial condition. And if you continue to save daily, you will be building a cushion for your life. In case of financial stress, income stress, or a health issue, your savings will ensure that your life stays healthy.
Very rightly, all the intelligent people follow this quote, Save before you spend. Now it is your time to become intelligent.
6) Get rid of debts – stay free
If you are one of those who are currently in debt, you know how painful it can get to repay the debt. However, it should be your first priority to repay all the debts. You need to plan smartly on this. Even if you need to let go of many of your non-essential expenditures for this, you must try to become debt-free as soon as possible. Only once you are debt-free, can you start your journey to become rich. So, avoid using debt/loan for life luxuries. Debt/Loan must strictly be for extremely essential things and one must plan properly for repay.
Always remember, when in debt you are more or less a servant. A debt-free person gets the best sleep. So, the choice is yours.
7) Overdose of Credit cards can be poisonous
Same as debts, credit cards can be poisonous for your financial health. Using them wisely and for essential things is the key. Using credit cards for luxuries that you can’t afford at this point in time is like giving a kid a real gun to play with. There can be harmful consequences.
Having said that, if you are using credit cards properly for your own benefit then you can continue using them in the same way. These instruments are there for making the money flow easier for you, so use them for that purpose only.
Also, having a bunch of credit cards is not something to be proud of. Doing so will definitely take money from your pocket in the long run instead of giving you something.
Always remember – credit cards can give you instant buying pleasures which often bring along painful repayment process.
8) Spend Optimization is the key
Even if you have enough money, you can spend it all and yet not fulfill your desires. So, it is important for you to optimize your spending. Always keep optimization in mind while spending. If you want to buy a laptop, you should know that there is a huge range of laptops in the market. You must only buy the laptop configuration that you need. If you are not into gaming or heavy graphics, don’t pay for that extra graphic card.
Similarly, if you are looking for some furniture, look out for some great second-hand deals. A lot of times people move and sell their luxury stuff for cheap. Grab those opportunities.
For every expense that is going to be bulky to your pocket, gather some knowledge and use it before hitting the buy button. You will definitely save money. Keep asking yourself, ‘How to stop spending money unnecessarily’, before making any big buys.
9) Love DIY
If you are reading this article, you are already trying to manage your expenses yourself. Doing it yourself is the key to many spending problems. Keep learning some basic skills related to household activities and try to use them when the need arises in your home. You can be a beginner DIY carpenter, plumber, electrician, or gardener. Just keep learning small things which can save your money. DIY activities not only save money. but also make you more self-dependent and creative.
DIY is such a key instrument that can do wonders by helping you save and earn money at the same time. You can start making videos of your DIY activities and upload them on YouTube and other video platforms. Millions of people are looking for DIY video, who knows you hit the online earning jackpot with your videos.
10) Earning more before spending more is the way to go
You will hear a lot of people telling you that money has great importance in everyone’s life. Be it basic necessities or luxuries, money is capable of providing you every physical thing. It is important to have a check on your spending. But it is more important to look for different ways to earn money. If your income improves, your spending can have several relaxations. So, it is important to take out some time and explore the various ways of earning money. You must consider the following ways to improve your income-
i) Turning a hobby into a side income avenue.
ii) Utilizing various online earning methods such as blogging, affiliate marketing, You-tubing, etc.
iii) Selling those articles you possess which are no longer in need
iv) Improving on your current job.
v) Doing a part-time job.
vi) Tutoring.
vii) And earning from anything else you are good at.
The bottom line is if you want to spend more, earn more.
Once you find that extra source of income, you will have more to save, and also more to spend. Earning extra always does wonders.
In Conclusion
‘How to stop spending money?’ is one question which can have many answers. There can be many ways to succeed in stopping the money outflow. It all starts with knowing your current money inflow and outflow situation. Once this identification is complete, you need to ensure you have enough money for the essential requirements of your life. You need to keep aside this sum at the start of each month. Then you need to identify the possible spending culprits. You need to put curbs on these items. You need to ensure that you save money out of these items. Stop yourself from impulse buying. This will do wonders.
Next is savings. Whatever money you save you should ideally invest for your future. Once the saving habit is ready, you need to ensure you don’t get into debt traps. Using credit cards for luxuries is a big no.
Optimizing your spending is a key attribute for spending less. DIY is another answer to the question – How to stop spending money.
Finally, improving your income does wonders to help you manage your budget in a much better way. Finding out that extra source of income is always important for a better financial condition. Remember – Earning more leads to saving more even after spending more.
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