How to Stop Spending Money and Avoid Overspending

“If I had an extra $1,000 a month or if I just made $100,000 a year, all of my problems would go away.”

The truth is, if you don’t know how to manage the money you already have, earning more of it won’t magically make your financial anxiety disappear. In other words, you can make $10,000 or more each month, but if you’re spending it all, you’re not getting anywhere.

How can you take control of your spending and avoid living paycheck to paycheck, even as your income and assets grow?

Here are five practical tips for how to not spend money, which may help move you toward financial freedom.

1. Be aware of spending temptations

Spending too much can happen for different reasons. Social media can often make you want things that you see others enjoying. “Buy now” buttons can make purchases easy. Credit cards offer a welcome convenience, making it possible to buy items even if you don’t have money in the bank.

However, instant gratification might hurt your efforts to save money for the future. Understanding and controlling these temptations is important; so is being kind to yourself and finding a balance. It’s okay to treat yourself sometimes but try to commit yourself to financial responsibility.

2. Live within your means

It’s important to create a budget and then to work hard to stay within it. Write down your expenses or download an app to track your income and see where your money is going. Paying with cash can help you control spending, while using a debit card can help you track what you’ve spent.

By reviewing your spending regularly and seeing the numbers in black and white, you can identify your money habits and target any you’d like to change. This way, you can work to break the cycle of living from one paycheck to the next, struggling to save, and falling deeper into debt. You might even find that you can automate savings contributions to make saving money a habit.

3. Adjust your spending as needed

By focusing on your budget and financial habits, you can see if your actual spending is aligned with your goals and priorities. You’ll also be able to learn how to stop overspending on stuff that you don’t really care about, need, or use.

It’s far easier to make changes and realign your spending when you can pinpoint exactly what’s keeping you from reaching your goals. And it’s easier to stay accountable to those priorities when you make tracking your financial activities a daily practice.

4. Avoid impulse buying

Once you have a tracker set up, you can check it before buying new clothes or booking a spontaneous getaway. That way, you pause to assess whether the expense you’re considering fits in your budget or pushes you further from your financial goals. Keep in mind that when you have a lot of debt, small purchases may seem less significant, but they still add up.

A shopping list is also useful—if you stick to it. If an item is not on your list, ask yourself if it's a necessary purchase. Accept the idea that you could buy it tomorrow if, after some thought, you still believe it’s needed.

5. Focus on debt reduction

After determining how much money you have coming in and going out, it’s time to explore ways to reduce your debt. One effective strategy may be debt consolidation. By combining multiple debts from credit cards, high-interest loans, or other bills into one set regular monthly payment, you may be able to save money on interest. Notably, 85% of surveyed customers told us taking out a Discover® personal loan for debt consolidation helped improve their financial future.*

Recognize that you’re not alone

If overspending has put you on course to high debt and insufficient savings, know that many others are in a similar boat. According to the Federal Reserve’s annual report on the economic well-being of U.S. households, nearly 40% of consumers could have difficulty covering an unexpected $400 emergency expense with existing savings .

While knowing that you’re not alone might help ease your anxiety, don’t let that become an excuse. So, pause before you buy, and be sure to check your budget.

Remember: you don’t own your income; you own only the part of your income that you keep. A commitment to live within your means, pay off your debt, and increase your savings could enable you to build meaningful wealth. This approach may help you sustain your financial health for the long run, no matter how much money you’re making.

Would a Discover debt consolidation loan help your financial situation? See if you qualify and get your rate and monthly payment.

Articles may contain information from third parties. The inclusion of such information does not imply an affiliation with the bank or bank sponsorship, endorsement, or verification regarding the third party or information.

The information provided herein is for informational purposes only and is not intended to be construed as professional advice. Nothing contained in this article shall give rise to, or be construed to give rise to, any obligation or liability whatsoever on the part of Discover Bank or its affiliates.

*ABOUT SURVEY

All figures are from an online customer survey conducted September 14 to October 3, 2023. A total of 1,191 Discover personal loan debt customers were interviewed about their most recent Discover personal loan, with 550 of them using the funds to consolidate debt. All results @ a 95% confidence level. Respondents opened their personal loan between January and July 2023 for the purpose of consolidating debt. Agree includes respondents who ‘Somewhat Agree’ and ‘Strongly Agree’.