We have been undergoing a period of financial uncertainty throughout the country, and many people have felt uneasy. With interest rates still high and prices remaining high across the board, saving for the future to ensure financial security might become a higher priority for the average person. Saving or investing in various assets is a sensible direction to take in light of the developments regarding diminished purchasing power. Some safer options include high-yield savings accounts, which are intended to help lenders earn interest on their savings to counteract inflation. However, in order for this to work, you need to have money available to invest or put in a savings account. Cutting back on unnecessary spending (which we can all admit that we have taken part in at some point recently), will allow you to lay the foundation for a more financially free future by taking significant steps to grow your wealth. This is not even taking into account that savings can assist with the basic necessity of having an emergency fund, reducing your likelihood of getting into a drowning debt in the event of an emergency.
Cutting costs can seem impossible, infeasible, or just overwhelmingly difficult to maintain over time for some. This article will reveal to you 10 relatively simple ways to limit your spending and then describe how each can help you in the long run.
10 Strategies to Help You Figure Out How to Stop Overspending
1. Organize Yourself
First and foremost, when figuring out how to stop overspending, it is important to know exactly what you are spending your money on and how much of it you are spending per charge. Setting up a budget for yourself will help you track your spending in relation to income. You can easily get started on Excel and find some templates there. Organizing fixed and variable expenses can help track what is necessary and unnecessary for your life. Also, the visualization of your expenses can help you realize where your money is going, and if you see that things are not adding up, you can make adjustments accordingly. Overall, a budget can give you control over your finances.
On top of this, time management is imperative to keep yourself on track and on budget. Oftentimes, many payments, especially recurring ones, have late fees. These late fees are completely unnecessary and cost you more money for no added benefit while also being completely avoidable. Being generally on time for important events can help avoid last-minute purchases that are made out of stress management or impulse.
Through a phone app, a notification for when payments are processed can help give you feedback on your spending, providing you with a reminder of the money you spent. It can have a certain discouraging effect if after you already made your payment you see the subtracted amount finally go through.
2. Utilize DIY Techniques for Home Tasks
For many tasks that involve maintaining the household, it would save money to take care of it yourself. A housecleaner can cost anywhere from $45-$50/hour, which adds up over time with such a consistent need. You can save yourself a lot of this money if you keep up with maintaining your house constantly rather than having to clean it all at once. Washing clothes on your own can also be something that saves money over time rather than taking it to a dry cleaning service. Landscaping is a task that families in suburbia must take care of to ensure their property looks organized and well-maintained, but can easily be taken care of with a lawnmower and consistent care.
3. Keep Tabs on Marketing Calls/Emails/Social Media Accounts
Everyone receives phone calls from unknown numbers attempting to sell you a product or service. You can remove your phone number from the telemarketing registry by calling 1-888-382-1222 from the phone you want to remove. Avoiding these calls saves you time but also limits your exposure to products you most likely do not need.
Many people’s emails are flooded with marketing emails from companies that somehow gained access to their information, and this can interfere with your normal email-scanning process. Emails from these companies can be highlighted and written in a way that is designed to capture your attention. What makes it worse is that they are likely to recommend these products based on your recent searches, internet interactions, and other forms of data. By closing yourself off to corporations’ need for data, you can better protect yourself from falling into the hands of predatory marketing strategies. There are several easy methods you can use to remain anonymous on the internet.
The idea here is that if you really need or want something, you will seek out the information necessary to purchase it yourself. This would help you make more well-thought-out purchases rather than someone making an emotional appeal or pressuring you to speed up your thought process by advertising your “limited-time offers”.
4. Make Sure to Shop with a List
When shopping in person, it is helpful to already have what you want/need in mind. Places like malls and grocery stores are designed specifically to attract your attention to the more expensive items/isles. Architecture, colors, signage, and organization of stores all contribute to the experience which was decided upon in a well-thought-out manner. Shopping tendencies suggest placing things like “grab-and-go” items (snacks, drinks, bread, gum) near the exits, or placing more expensive specialty items at eye level to improve accessibility and visibility. Shopping with a list, and including specific brands, can prevent you from overshopping and also keep your mind on a specific goal when attempting to
5. Use Public Transportation
This is a great way to save money and energy on your daily rides. A train or subway ride in the US is usually a couple of dollars. This takes better planning on your part, so it would be beneficial to follow the first strategy and also organize your schedule to accommodate longer wait times, longer travel times, etc. Another positive is that you do not have to deal with the bustling rush hour traffic in the mornings and evenings on your way to school or work. Rush hour traffic is a very inefficient way to waste gasoline during stand-stills on the streets.
If using public transportation is not feasible or too inconvenient for your schedule, carpooling is another way to limit spending on transportation. By splitting gas/parking with others, you can easily divide your total spending by 2 or more per trip, which adds up over time and can save you the stress of driving.
6. Form Energy Efficient Habits
Similar to using public transportation, remaining mindful of your energy consumption can help you save money as well. Using the train/subway lowers not only your gas spending, but also money spent on parking, tolls, and other driving expenses.
With regard to other energy-saving techniques, shutting off lights when they are not necessary can be a practical option to lower your electric bill. This same principle applies to televisions, air conditioners, fans, washing machines, and dishwashers. For washing machines and dishwashers, these will use more energy when the water is made to be hot from the water heater. There are not many household appliances that use more energy, so efficiently using dishwashers and washing machines by adequately loading them would help as well. It can also save money on your water and electricity bills to use the dishwasher sparingly by washing dishes by hand.
7. Meal Prep
Referring back to the point about time management, meal prepping/planning is a surefire way to ensure you do not overspend on food. Of course, it is okay to go out to eat at a restaurant every once in a while, but having takeout or delivery every week can hurt your budget and cut into your savings. It is better to find the ingredients yourself to prepare your own way to maximize your money for the portions you eat. It is important to manage your time successfully so as to have time to cook and prepare your main meals and avoid the delivery fees from companies like DoorDash and Uber Eats on a day when you do not have time to cook.
8. Allocate Money For Specialized Categories
As previously mentioned, an emergency fund is essential for everyone. It is your own personal insurance that will completely go back to you in the case of an emergency. Getting into massive debt after something already debilitating happening to you is something that may be unsustainable for most people and can delay your full recovery from a situation. Setting aside money from every paycheck to go into an emergency fund would allow you to bounce back quicker should the situation arise. Imagine you get injured and cannot work for a couple of months and earn no income, an emergency fund can keep you afloat while you are working on getting back on your feet.
Part of your income can be designated for leisurely activities, and it allows you to set a clear and distinct limit on yourself rather than spending at whim. Once you receive your paycheck, you must already take necessities like rent or mortgage, car payments, and groceries, all into account before making other decisions about how you would like to spend your money.
9. Take Time to Think About Big Purchases
When considering buying that new luxury sedan or that new necklace, it is helpful to give yourself some time before actually going through with it. Big purchases can feel good in the moment, and even shortly after, especially for fun materialistic purchases. Right before you feel you are ready to purchase something, it can help to follow the “24-hour” or “48-hour” rule, in which you take a certain amount of time to reflect upon a large purchase to eliminate the impulsivity of it.
10. Remain Aware of Brand Premiums
Name brand products are usually much costlier alternatives than generic brand products for a wide range of products. In drugs, for example, generic products are 80-85% cheaper than their branded alternatives but have the same ingredients in their product. Accessibility and successful branding have contributed to the branded products keeping prices inflated, but people will still purchase them. Many grocery stores also place generic branded products at the bottom shelf with the hope that people will not see it in place of more expensive items at eye level. Usually, generic grocery items are of comparable quality, so it is up to you to decide what items you are willing to lose a little bit of quality for lower prices. This goes for makeup and clothes as well, since many products come with a brand premium since they know consumers are willing to pay for these premiums. Generic clothes may not have the same quality, but they offer the same functionality. On top of creating a list before shopping, researching the specific products and brands that you should purchase beforehand can help you pick out the cheapest options and save every time you shop.
Conclusion
At the end of the day, much of people’s unnecessary spending comes down to convenience, simplicity, and accessibility. Companies have done extensive research on human psychology to capitalize on their tendencies to want the “convenient” or “easy” solution to things, and these come with their own premiums. In order to save money on most of your purchases, you must be actively searching for alternatives other than time-effective solutions. For example, branded products are much more likely to be marketed than the generic versions, even though they have the same effect. Marketing campaigns take sociological tendencies into account and often operate covertly to capture the attention of potential consumers without them even realizing it.