4 ways to avoid overspending

It may come as no surprise that consumerism has increased across the United States. This phenomenon has been covered in various news articles and is often associated with marketing, cultural expectations and impulsiveness. 

If you struggle with shopping, overspending or living above your means, you’re not alone. Here are a few tactics to reject consumerism and stop overspending.  

Why do we overspend? 

Overspending doesn’t necessarily look the same for everyone. If you find yourself spending more than you can afford, it’s important to identify why. Here are some of the most common reasons people overspend. 

• Social pressure: You may feel pressured to ‘keep up’ with your friends’ or family’s spending habits. For instance, your friends may want to go out to an expensive restaurant that’s out of your price range, but you don’t want to miss out, so you go anyway and spend over your budget. 

• Lifestyle creep: If you get a new job or internship that increases your overall income, you may start to experience 'lifestyle creep.’ This happens when your expenses unintentionally creep up as your disposable income increases. For instance, you may go shopping or eat out more often because you can now afford to. However, if you spend too much it may not always feel like you have more money in your pocket. 

• Emotional spending: Have you ever indulged in retail therapy? Heightened emotions, both positive and negative, can cause people to spend more money and make more impulse purchases. In many cases, this may lead to more anxiety over your finances or buyer’s remorse. 

• Impulse purchases: Seeing influencer recommendations and ads on Instagram or TikTok can be tempting, especially when it feels like something you might want or need. For instance, you may see a piece of clothing or home product that you think would look good or be useful. However, it’s important to remember that influencers rely on sales commissions to make money and are motivated to sell as many products as possible. 

• Credit misconceptions: Many people have misconceptions related to credit card use. In some cases, people may think that credit cards give them access to more money than they may have in their checking accounts. However, this money doesn’t come for free. If you use credit cards without adequate funds to pay your bill at the end of the month, you may incur fees or interest, which means you’ll end up paying more than you would have. 

If you identify with any of these scenarios, you’re not alone. Here are some tips to help you curb your spending and avoid impulse purchases. 

1. Review all your current expenses 

Do you know exactly where your money is going? One way to find out is to review all your expenses and break them up into categories. 

You can do this by printing a copy of your bank and credit card statements or using free online apps like Rocket Money. If you can, try to look at two months’ worth of expenses. This will give you a better overview of your average spending. 

As you look through your statements, try to break up your spending into two main categories: 

• Essentials: This includes things you need to buy or pay for like your rent, utilities, phone, Wi-Fi, gas, groceries, etc. 

• Non-essentials: This includes things you can probably live without like shopping, eating out, movies, concerts, etc. 

If you notice that you are spending a lot of money on non-essential items, it can be helpful to break down this category even further. For instance, you may look at how much money you spend on clothing, entertainment, eating out or trips. 

Understanding exactly where your money is going can help you figure out how you can cut back. If you need additional help budgeting, check out this article for more tips. 

2. Avoid autofill options 

Having your credit or debit card information saved on your phone or browser is convenient. However, having the option to ‘autofill’ your payment method can also make it easier to go over budget on impulse purchases. To avoid this, try removing your card information to see if it helps you spend less on non-essential items. 

Additionally, some apps may have automatic reloading options. One example of this is the Starbucks app, which allows you to automatically reload your card when your balance is insufficient or running low. These features make it easier to lose track of how much you’ve spent. Instead of reloading your card each time you run out of funds, try adding a set amount at the beginning of the month. Once that money has been used up, commit to waiting until the next month to add more. That way you’ll be able to stick to your budget better and know exactly how much you’ve spent in a given month. 

3. Avoid shopping on impulse 

Impulse purchases, even small ones, can add up quickly. If you see a product you’re interested in, try to take a pause and avoid buying it right away. This can help you avoid purchasing things in the moment or on a whim.  

Here are some tips to help you avoid impulse purchases: 

• Shop with a goal in mind: Create a list of what items you specifically need or want. For instance, you may need to replace a shirt that is damaged, or you may want to invest in a new computer. Having a list can help you avoid temptation and focus on only getting what you need. 

• Wait to buy: If you see something you want online or on social, avoid buying it right away. Instead, try to give yourself a week or two before making a decision. Chances are you may forget about the product completely or realize it’s not something you need right now. 

• Don’t save items in your cart: While you’re waiting to buy something, it may be tempting to ‘save it’ in your cart or on a wish list so you don’t forget about it. However, this can create more temptation when you go back to your cart and see something you wanted to buy but didn’t. Instead, let it go. If you are still thinking about it in a couple of weeks, you’ll probably remember what it was and where to get it. 

• Avoid sales: Sales can often cause people to spend money on things they wouldn’t have otherwise bought. This is because you may be enticed by a lower price tag or a good deal. If you’re trying to stop overspending, try to avoid shopping during sales season. If you’ve created a list of specific items, you can shop sales for those things but be wary of getting influenced by the price tags of other items. 

4. Practice mindfulness 

Overspending can be a hard habit to break. That’s why it’s important to practice mindfulness whenever you’re shopping. Here are a few questions to ask yourself before making purchases. If you answer mostly yes, it may be a good purchase. If you answer mostly no, it may be best to skip it. 

• Have you thought about buying this for at least two weeks? 
• Does this product solve a genuine problem in your life? 
• Will you still be using this a year from now? 
• Do you know where this product will go or be stored in your home? 
• Could you borrow or rent this item instead? 
• Is this a quality item that will last a long time? 

Asking yourself these types of questions can help you determine which purchases are worth it (and which ones aren’t). You may also want to consider things like how many hours of work it would take you to pay for an item. This tactic can also work well for non-product purchases like eating out or going to the movies. If you need to spend several hours of work to afford it, think about whether or not it’s worth it to spend that money. 

Resources 

There are a variety of resources available for students, staff and faculty to support your financial well-being. Here are a few to check out. 

Resources for students 

Resources for staff and faculty