Confession time: I was a chronic spender.
I can trace this habit back to early childhood and envy people who eat brand name cereal and have refrigerators with ice dispensers in the door. My parents were both hard workers, but they were just making ends meet trying to feed, house and clothe four children while working jobs that were just jobs, not careers.
For some, money represents freedom, opportunity, security, or peace of mind. For me, money was an obstacle to my goals and dreams. It was the reason I couldn’t do or have the things I wanted in life.
Different people have different responses to growing up in an environment where money is scarce. Some become diligent savers and long-term planners, in order to avoid such a fate in adulthood. Some learn to be content with what they have. I became materialistic and eager to prove that I was “worth” as much as other people who had expensive homes, clothes, cars, etc. I’m not proud of it, but that’s how it was. I know I’m not the only one.
Over time, study, self-awareness, and experimentation, I have replaced financial self-sabotage with habits of mind and behavior that improve me financially and psychologically. If you struggle with overspending, either habitually or occasionally, I hope the process outlined here can help you make more solid choices that satisfy your desires without sabotaging your financial security.
4 steps to fight overspending
Step 1: Admit that overspending is a problem
Stop rationalizing and start recognizing your weak points. Are there certain areas of spending where you tend to go overboard?
Maybe you get carried away buying gifts during the holidays. Maybe it’s an extra glass of wine at the restaurant. You might have all kinds of justifications for your spending, such as “I deserve it! Friends may encourage you to “treat yourself!” Whatever the trigger, you can’t make changes until you know what to focus on.
Here are some prompts to get you started:
- Think of a time when you kicked yourself for spending or overspending.
- What did you buy or do?
- What were the emotions you remember feeling before and just after?
This can be the most difficult step as it requires honest self-reflection. The more honest you are with yourself, the more you can focus on your true motivations, making lasting behavior change more accessible.
I feel the need to splurge when I feel bored, depressed, or insecure. If I don’t feel like a particularly shiny version of myself, I’m tempted to upgrade my wardrobe or my house. At first, it feels good, but it quickly turns to anxiety and regret. In the long run, overspending is costing me more than it’s worth in terms of peace of mind and self-respect.
Problem: identified. Emotions: named. This is step 1.
Step 2: Identify your needs
Learn the language of money management needs and strategies. I have written extensively on this subject because it is fundamental to making deeply satisfying changes.
In short, everything you do with your money is a strategy to meet a basic human need. Needs are universal and relevant to everyone, everywhere. They fall into the following basic categories:
- love and belonging,
Some strategies to meet our needs are effective, others are not. Some are affordable, some are not. The trick is to find a strategy that is both affordable and satisfying to you as an individual.
When you take a needs versus strategies perspective, you get a deeper motivation behind spending, opening up new possibilities to meet your needs without spending more than you can afford. Use the clues you uncovered in Step 1 to identify the need(s) the expense is addressing for you. Then think about the needs that morespending threatens.
When we learn to think this way, “I need a new outfit” becomes “I need to feel confident.” There are many ways to achieve this goal without going over budget. In fact, irresponsible spending will likely erode your self-esteem in the long run.
Step 3: Think about new strategies
When we focus on a specific strategy, we can become myopic, seeing only that or similar options. When we turn our attention to the need that drives the strategy, a host of new possibilities open up before us.
Consistent with the clothing example, once confidence and self-expression are identified as the motivation, a strategy to meet those needs can be found that reduces or even eliminates expense.
I remember the first time I walked away from a full basket. I looked at the cart, realized I was driven by negative emotions, and decided to avoid financial self-sabotage and walk away. I didn’t put things back. I did not reduce them to the budget. I left the cart and my bad habit where they were and drove off. It was liberating and uplifting, and more effective in boosting my mood than any purchase would have been. I’ve learned that when the urge to splurge is rooted in insecurity, I can often meet the real need more effectively with sleep, reflection, time with friends, or a good sweat. None of these cost a dime.
When it is unrealistic to completely eliminate expenses, harm reduction can be helpful. Expenses less is better than doing nothing to solve the problem.
Here are some examples of harm reduction strategies that could help you control your spending:
- Buying a new outfit from a clearance rack can be as fabulous as any.
- Giving economical gifts with love is often treasured longer than expensive gadgets.
- Resisting peer pressure can earn you more social capital than acquiescence.
- The cheapest drink on the menu still saves you time with your friends.
I recommend having one or two thoughtful alternatives before you enter an environment where you will be tempted. The heat of the moment is a terrible time for problem solving. If it helps, jot down your alternative strategies on a note card and keep it in your wallet. The next time you feel like splurging, it will be easier to think of alternatives because you will have already thought about them.
Step 4: Try, try again
Overspending isn’t something many people talk about openly, so you’re unlikely to have a crowd of people to cheer you on as you navigate your temptations. You will probably have to be your own cheerleader. It may be difficult, but rest assured that you are not only. Millions of people struggle with overspending, and deciding to make a change is something we can be proud of.
Some days will be easier than others. If the thought of never splurging again fills you with despair instead of pride, then pull out a page from the addiction recovery playbook and focus on today. Can you find alternatives to spending only for today? If so, then go for it! Tomorrow you can decide if you want to start over.
Habit change takes time and repetition. One way to help solidify a new habit is to immediately reward yourself for doing the new thing instead of the old. The reward doesn’t have to be big. Put a gold star on your calendar or in your journal for the day, and write down what you’ve done and why you’re proud of it. Something as simple as a mental, “Heck, yeah!” that you walk away might do the trick. However you choose to do so, be sure to find a way to bask in the feeling of accomplishment and self-respect for at least a moment each time you manage to resist the temptation. This will help mentally reinforce the new pattern of behavior.
You will probably slip. Its good. Overcoming overspending is not easy. You will have victories and failures, but progress will happen over time if you persevere.
If I can do it, so can you! And even if you don’t hear me, I encourage you!