It seemed like a good idea at the time. But then, it always seems like a good idea at the time. The problem is later. When you get the credit card bill and it’s too high. Or you check your bank balance and see that the number it’s too low. But that one little purchase couldn’t have caused so much trouble!
Or could it?
I opened the credit card bill and wondered how it could be 4 figures before the decimal point. What did I buy?! As I looked over the list my stomach sank; it was all accurate.
It’s easy to spend $20 here and $50 there and think those smaller amounts won’t add up to much. Sometimes they don’t. But when you have enough of them, you can spend hundreds or thousands of dollars that you just can’t afford. And it can happen month after month.
If you’re spending more than you want to, you have to cut back, but that’s easier said than done.
Lucky for you, here are 5 simple tips that will have you spending less right now! And you can sign up below for a quick-and-easy 1-page downloadable cheat sheet of these tips.
#1 Empty your checking account
It’s easy to spend when there’s a bottomless well of money. That’s how a credit card can feel, anyway. That’s also how a debit card feels when you have plenty of cash sitting in your checking account “just in case.” So here’s what you do:
A) Take your credit cards out of your wallet. Put them in the back of a drawer for dire emergencies only.
B) Choose some spending categories to focus on.
C) Open a new checking account for those categories. Figure out how much you want to spend each month on them. Put this amount in your new checking account. This is not the account your paycheck goes into and it’s separate from your monthly bills. You want to have money in your primary checking account that’s available for rent and the electric bill without worrying that you’ll accidentally spend it on shoes and burritos.
D) Use a debit card for all of the spending in those categories above. You now have a built in limit!
That’s it! You can set up money to transfer into this account automatically every month, or you can do it manually. If you use up the money in that account before the end of the month, then you’ll have no choice but to stop spending because there simply won’t be any money left to spend!
#2 Use prepaid credit cards to prefund your spending
When you tracked your expenses you might have been horrified to see how much you spent on dinners out and cute clothes. Now, unlike in #1, you can limit your spending by category. Get a few prepaid credit cards and fund each with only the amount you want to spend this month. Grab some masking tape and a marker and mark one “Clothes” and the other “Dinners out.” Use whatever categories you want to focus on.
Now go enjoy your life, and when you buy clothes use only the Clothes card and when you eat out use only the Dinners Out card. When the money runs out, you’re done spending, like it or not. It might mean more dinners at home towards the end of the month, but wasn’t that the idea?
If you have money left over, you can decide if you want to carry it over to the next month, or maybe put less on the cards next month instead.
#3 The envelope method
This is an oldie but a goodie. This is a lot like #2, but with cash. You take a few envelopes and label each one for different spending categories. Then, you put all of the cash you’ll spend for the month in each category into the respective envelope. When you pay for something in person, you pay with the money from the right envelope. When you pay for something online, take money out of the envelope and put it into a “credit card” envelope so that you have money available later to pay the credit card bill.
Let’s say you usually spend $800 at the grocery store and you want to eventually cut it down to $300. You decide to start slowly, and this month your budget is $700. You put $700 in the envelope on the first of the month. Near the end of the month when you see that you’re running low, you can start making meals with nonperishables from your cabinet. Sure, you were excited to try that new recipe, but it can wait until next month when you have the cash for it again. You’ll quickly get in the habit of spending less.
#4 Reward yourself
If you’re someone who loves getting rewarded for reaching your goals, this is the method for you. Find something (preferably something free!) and reward yourself when you spend less. Give yourself small rewards every month, or even every week, and then do something bigger every 4 months as you continue to succeed.
You might decide that every day you bring lunch to work instead of eating out, you’ll reward yourself in the evening with a long luxurious bubble bath or some decadent dessert. Then at the end of the month, if you’ve met your goal of bringing your lunch 8 times, you’ll reward yourself with something bigger, like ditching your chores and spending a day at the beach. If you meet your goals for 4 months in a row, you’ll reward yourself with a fun celebration with your girlfriends.
Choose some rewards that will motivate you and go for it!
#5 The negative approach
Rewards don’t work for everyone. Instead of trying to get a reward, some of us are more motivated by trying to avoid negative consequences. What’s something you’d really hate? Talk to a friend you can rely on to make sure that horrible thing will happen if you don’t reach your goals.
It could be that you embarrass yourself publicly. Go online right now and declare that you won’t spend more than a certain amount on concerts every month. Then go online and announce publicly every month if you’ve met your goal or if you’ve failed.
Or take the political approach. Give a reliable friend a check for some amount you can afford, but that is significant to you. For some people this will be $50, for others it will be $500 or $5000. Address that check to the political candidate or group you most despise. Your friend will have instructions to mail that check if you don’t reach your goal. For me, this would incredibly motivating!
Why stop at just one?
While you’re at it, you might as well use a combination of these. Maybe use cash envelopes for some spending categories and a debit card that debits a very limited checking account for the rest.
Or use prepaid credit cards, and reward yourself if you have money left over on each one at the end of the month.
Or use negative consequences as motivation, then reward yourself by announcing your success on social media or donating to your favorite political group.
Try them all!
Remember, like with anything else, if the first thing you try doesn’t work, just try something else. There’s nothing wrong with failure – it’s how we learn. The only problem is if you don’t try again. So keep going until you find success!
Then next month you can lower your spending even more. Keep going until you reach a spending level that you’re comfortable with and that allows you to save.
Print out the 1 page downloadable cheat sheet of these tips and check them off as you go! Just sign up here:
What works for you?
Please comment below and share what works for you! Maybe it’s something on this list. Maybe it’s something else. I’d love to hear what you do, and we can all learn from each other’s successes!