Sometimes life can feel like a financial revolving door: as soon as you earn your paycheck, you spend the money. When the next paycheck comes in, it flies out the door as well. This behavior can go on and on, unless  you focus on how to stop spending money. Here are helpful tips to  break the cycle of always earning but never getting ahead.

Stop mindless spending

Thankfully, anyone can jumpstart a new life of savings through a vacation — from spending. This adventure goes by many names, such as a spending “challenge” or “fast” or “diet.” No matter the name, it’s a call to stop the cycle of mindless spending. Then, you can take it one step further and redirect your cash surplus mindfully toward more meaningful experiences or things.

One simple rule for how to stop spending money

There’s one simple rule for a shopping break: If it isn’t essential for living, don’t buy it. If this sounds daunting, know that you don’t have to go it alone. Goal setting, rewarding yourself and trying this adventure with a friend can go a long way. Building a healthy financial habit can be a lot like going to the gym; in order to see the results that you want, it takes lots of discipline and commitment.

Establish your personal financial baseline

Before you try to change your spending behavior, it helps to know the patterns you’ve developed. Take a look at your financial statements over the last six months. On average, what do you spend every month? How much do you spend on “needs” (i.e., rent or mortgage payments, transportation, and groceries)? Now, what about the “wants” (i.e., food deliveries, after-work drinks, or another pair of shoes)?  Without self-judgment, write down the average amount you spend every month for every category. Once you know your numbers, you’ll have a better understanding of necessary expenses versus mindless spending.

5 ways to help slow your spending

Often people have big ideas of how we want to change, but we don’t know how to begin the process. The financial baseline you just established is a good start. When it comes to how to stop spending money, each of these five scenarios offers a start.

1. Stop spending on your “wants” for one month

As you just determined in your spending patterns, the wants include dining out, buying new clothes and shoes, streaming TV services, and anything else you can live without. (No, really, a life without streaming is possible!) For one month, skip these expenses.

The new you: Put the money you recover into a savings account. Even if it is a small amount, it will get you into the savings habit and likely help you realize how much stuff you don’t need.

2. Start no-spend Mondays

You’ve heard of meatless Mondays, right? Well, this is its fiscal cousin. Sure, you may still have some ongoing bills that occur on a Monday, like rent or car insurance. The point is to deactivate your wallet on Mondays. Bring your coffee from home, pack your lunch and walk to work (if possible).

The new you: Redirect your spending into something meaningful. If you spend $20 every Monday, for example, in one season you can plug the money you save from your no-spend Mondays into a very nice $260 dinner for two.

3. Delete your credit card from shopping sites

When people are stuck in a bad habit, anything that slows down the behavior can help break it. For online shoppers, it’s especially dangerous when you can spend money with just one click. When you look at your expenses, how much have you spent on compulsive purchases online?

The new you: Delete your payment methods from the usual spending traps. If you find yourself on a favorite shopping site, this will give you reason to slow down, as you’ll have to manually input your credit card. Take that time to consider whether or not you really need to make the purchase at all. If you’re spending $200 a month on one-click shopping, this simple action will send $1200 into your savings account over the next six months.

4. Enjoy cash-only weekends

How much do you spend on a typical weekend? Let’s say it’s $150 out the door. Now imagine if you trim this figure by a third, to $100. Over the course of fifty-two weekends, you’ll save $2600! A great way to get there is through cash-only weekends. Friday after work, take out $100 cash. Enjoy a movie, or dinner out, or both, up to $100.

The new you: Start imagining your cash-only weekends down the road. In a half a year, that $50 turns into $1,300 — add it to your retirement savings.

5. Build sustainable money habits

A spending fast is an opportunity to recalibrate your financial life, but what should you do with your newfound financial priorities? The trick is to redirect the lessons from your spending fast into sustainable habits. Don’t be afraid to refine your spending habits and meet change head on. For the long term, focus on being a world class saver and aim to save 15–20 percent of your annual income.

The new you: The 15–20 percent of your income that you save with discipline  money habits can be put toward a nest egg to buy a home, pay for a college education, or other milestone purchases.

Behind each of these ideas lies the goal to change a behavior around spending, and channel it into more personally valuable options. So, find new ways to help skip the everyday little expenses and commit to more quality, more meaning and more financial confidence.

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2022-146945 Exp. 11/2024