Money Management

How to Stop Spending Money You Don’t Have

How to Stop Impulse Buying for Good (Budgeting Hacks for People Who Have Failed)
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If you’re wondering how to stop spending money, does this situation sound familiar?

It’s 6:00 on a Thursday evening. You arrive home after an exhausting day at work + tiring commute.

Your weekend grocery shopping didn’t make it until Thursday. So, you decide to order out. It’s only a few extra bucks compared to preparing a meal yourself, right?

It’s now 8:30. You find yourself taking part in some online retail therapy. After what you went through today — it feels right to treat yourself.

Minutes later a friend texts if you want to go out to dinner this weekend. Even though money is tight, you say yes.

A few weeks later you get an email from your credit card company. Your payment is due. You log in to your bank account and notice there’s not enough. After some quick number crunching, you decide what you can afford — promising yourself next month will be better.

Sound familiar?

Maybe dining out and clothes are not your way of blowing your budget. Maybe you tend to stretch yourself on big purchases. Maybe you can’t give up on a good deal.

The fact is learning how to stop spending money and be more fiscally responsible is hard work.

But there are ways to save more money — and they’re often easier than you think.

When you read the research on self-control and willpower, it makes a lot of sense too. The standard approach to budgeting has many failing from the start. A few survive more than a month. An even smaller few develop good habits for the rest of their lives.

What makes the difference between those who learn how to stop spending money vs. those who develop and maintain a budget?

How to Stop Spending Money

The latest research on willpower, mainly from Kelly McGonigal of Stanford and Roy Baumeister of Florida State, has given us some excellent insight into how we can better control our actions.

If you’ve tried but failed to get your budget under control — give these tips a try.

Tip #1: Make Your Finances Your #1 Priority!

When we set goals we tend to make them across different areas of our lives.

But guess which person is more likely to succeed with their goals:

  • Person A – Is trying to lose 10 lbs AND increase their savings rate to 10%
  • Person B – Who is 100% focusing on increasing their savings rate to 10%

The research has shown Person B is more likely to succeed.


We have a limited amount of willpower that becomes depleted when we use it. Too, we use the same stock of willpower for all areas of our lives.

Say you’re trying to lose weight and save more money. You did a great job of resisting dessert today at work. However, that night you can’t resist a deal that was too good to pass up.

What you must remember is to focus only on one change at a time. You don’t have the willpower stored up to do two new things at once.

What helps is to think long-term. In one year, say you want to be fit and have your finances under control.

Instead of setting New Year’s Resolutions to do both — do one at a time.

Tip #2: Focus on Habits

With only so much willpower, it’s important to pick goals carefully. But if we’re trying to control our spending — what exactly should our goal be?

We’ve all learned goals should be SMART (specific, measurable, achievable, results-focused, and time-bound).

So, a good financial goal might be something like: “I’ll cut spending by 10% this month.”

That fits the SMART goal guidelines.

But again, it’s important to think long-term. Say, you’re able to cut spending by 10% per month.

But after making about a dozen or so changes — you’ve found yourself out of willpower.

Just as with most diets, what happens next? You’re back to your normal habits.

The ironic thing about people who have great self-control is that they don’t use willpower to resist whatever needs resisting. Instead, these self-control “masters” have habits.

The person who works out every morning doesn’t need to give themselves a pep talk every day. Instead, they get up and go workout. Sometimes it might be harder than others but the habit makes it much easier.

Goals are great for setting long-term visions. But it’s changing your habits that leads to lasting success.

If you want to cut spending by 10% — that’s great. However, the chances of you succeeding long-term will be much better focusing on habits.

So, pick one category of your budget (the one where you tend to overspend the most) and focus on cutting costs there.

Tip #3: Don’t Spend After Making A Lot Of Decisions

Steve Jobs famously wore a black turtleneck every day. For him it was one less decision he had to make each day.

Before it became a term in behavior science — Steve Jobs understood the concept behind decision fatigue.

It’s now well researched that the more decisions we have to make in a day, the lesser quality those decisions get.

Have you ever overspent money on a lazy Sunday morning after 9 hours of peaceful sleep and a healthy breakfast? Or, are you more likely to overspend on a Thursday night, bored, after a long week at work?

It’s the stressful, tired situations that we tend to slip.

So, what can you do?

A few tips to help:

  • Make important financial decisions early in the day after a good night’s rest
  • Avoid making decisions when you’re stressed or overtired
  • Make good decisions when you’re rested, that eliminate future decisions

The last tip is something to think hard about.

From the book, The One Thing comes the powerful question:

What’s the one thing you can do, such that by doing it, everything else will be easier or unnecessary?

It’s a question worth brainstorming upon.

A few ideas to get you started:

  • Increase your contribution to your 401(k), then budget what’s leftover
  • Set up automatic withdrawals to an investment or emergency fund
  • Freeze your credit, so it makes it harder for you to open new lines of credit

Tip #4: How Often Should You Track Your Spending?

If your goal is to lose weight, how often should you weigh yourself?

Daily? Weekly? Monthly?

The research shows those who weigh themselves daily are more likely to accomplish their weight goal.

Providing yourself constant feedback has also shown to improve your finances. From the excellent book Willpower by Roy Baumeister, which looked at how individuals habits changed after tracking their finances using Mint.

the data—culled from two billion transactions of three billion anonymous users—showed some clear benefits of monitoring.

For the great majority (80 percent) of people, the upward trajectory of their spending was tempered after they joined Mint and began monitoring their transactions.

And most people’s spending was further tempered if they used the information to set up budgets and goals on Mint. The biggest effects were observed in people’s spending on groceries, restaurants, and credit card finance charges—some very sensible categories

If you’re not already, start tracking your finances.

I like and recommend the app Personal Capital. Mint is another big name.

But don’t just track — do what the most successful users did and set up budgets and goals.

An email reminder or alert on your phone that you’re over budget can be powerful.

Tip #5: Never Say Never

As Mark Twain put it in The Adventures of Tom Sawyer:

“To promise not to do a thing is the surest way in the world to make a body want to go and do that very thing.”

Giving up something 100% is very hard.

For example, let’s say there are some clothes you’ve been meaning to buy. Instead of jumping right online and buying them, tell yourself “Not now but later.”

From the book Willpower:

…telling yourself I can have this later operates in the mind a bit like having it now. It satisfies the craving to some degree—and can be even more effective at suppressing the appetite than actually eating the treat.

So, go ahead and build up that Amazon wish list. Create a To Buy folder in a notebook. Whenever you feel the urge to buy something, add it to that wishlist.

Chances are you’ll forget about that “immediate need” in a month anyway.

Tip #6: Set Up a Discretionary Spending Account

Many of us know we need to start living on a budget. Yet, we fail to start. Often times this procrastination is due to feeling like we have to give up something.

If you’re going to succeed, you’ll have to change your behavior. But starting a budget doesn’t mean you have to give up whatever it is you enjoy.

In his book, Dollars and Sense, Dan Ariely Professor of Psychology and Behavioral Economics at Duke, recommends setting up a discretionary spending account:

When people tell us they have a hard time controlling their spending, we acknowledge that they could budget for everything, but we also tell them it’s likely to be so annoying that they’ll just give up.

Instead, we suggest they decide how much they want to spend on a broad category of “discretionary items”; the things that they can live without, like special brew coffee, fancy shoes, or a night of drinking. Take that amount, on a weekly basis, and put it on a prepaid debit card.

Now they have this category of discretionary spending with a new budget each Monday. The balance on the card will show how it’s being used and the opportunity costs within this general category will be more apparent and more immediate.

How to Stop Spending Money: Final Thoughts

Learning how to stop spending money takes time. But there’s a right way to go about the problem and a wrong way.

If you’ve failed in the past, there’s no reason you can succeed in the future with a better approach.

Good luck!

R.J. Weiss
R.J. Weiss is the founder and editor of The Ways To Wealth, a Certified Financial Planner™, husband and father of three. He's spent the last 10+ years writing about personal finance and has been featured in Forbes, Bloomberg, MSN Money, and other publications.

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