10 ways to prevent overspending

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About Maya

Maya is the founder of Memetales - a mobile reader and publishing platform for children's stories. Get your child reading by downloading the FREE iphone/ipod touch app with 20 Free books included!


Photo by Ludovic Bertron

Bargain shopping is great for finding great deals on items. Yard sales are a wonderful place to save tons of money and still find what we want. But how often do you walk into a sale “just to browse” and walk out with a bunch of things that you probably did not need just because they were a “good deal”?

I was a victim of a buy 4 get 5! bargain just a couple of weeks ago. I really only needed three items at $10 each, but I walked out with five items for $40. Lost $10 and gained two items I had no need for -– just to get a “good deal”.

As I thought about my spending behavior that day, I started to notice a number of reasons we overspend, when in reality, we are most earnestly trying to save money.

Here are some pointers to make sure you do not become a victim of slick marketing — or even your own good intentions.

1. Plan – Know what you need and want.

Not knowing what exactly I need is the most common reason I overspend. A quick run into the grocery store turns into a big bag of “nice-to-haves” every single time I let my mind estimate what my pantry needs.

Plan as many of your purchases as possible. Planning your weekly menu really helps with grocery shopping. Plan your gifts ahead of time so you can take actually take advantage of sales by buying the things you really need.

While I use Remember the Milk to organize my lists online, I always have a running pen-and-paper list handy. Paper lists really help to ensure I do not miss capturing the things that come to mind while I feed my kids, shower them, and so on.

2. Compare – Do your comparison shopping.

As prudent spenders, comparison-shopping is a prerequisite to smart spending. With great tools online, it is getting easier and faster to comparison shop.

I like sites such as Bizrate to check on prices of a number of things. Even if you do not shop on Amazon, it’s a great place to check the range of prices and reviews on things you want to buy.

Make a habit of searching your newspaper fliers for your weekly grocery items. Most recently, I have started using Bing, a site that compares prices and even estimates probability of prices going up/down on travel deals.

3. Budget – Set a financial limit.

A couple of times every year, I let myself just enjoy shopping for myself without a plan. Without a budget or an upper limit on these kinds of purchases, I am always likely to overspend. No matter what kind of spending, always budget for it, so you have an upper limit for every thing.

You can set a limit for your shopping in a number of ways. Use the envelope system, buy yourself a gift card for a certain amount of money, or use the zero-based budgeting system. Knowing that I will certainly NOT overspend even makes for a more enjoyable shopping experience for me.

4. Use cash – Credit cards are dangerous.


Photo by Martin Kingsley

Pulling your card out too many times could desensitize you to the money you are spending every single time you swipe your card. In order to prevent that, be sure to keep cash handy. Pay by cash as much as possible – it hurts more and feels like real money when you hand out those notes.

My husband considers it a little strange, but I have an online pay system set up where I need to approve all the payments before they go out. It is way for me to make sure I am consciously aware and take a moment to reflect on some of the spending in the past month.

5. Save first, spend later – Put away money before you spend.

When I got my first job, it took me a while to understand that savings is not the money that I am left with after I am done spending. In fact, my spending money is what I get after I am done putting a certain amount of money into savings.

By having more spending money, you are more likely to spend more. Be sure to challenge yourself to save as much as reasonably possible. In fact, put away a little more than the last month every time.

6. Keep busy – Fill your day with interesting activities.

Boredom was often the cause of my spending before I had my kids. This has changed quite a bit since I had kids, and shopping or strolling in shopping areas became more and more inconvenient.

Keep a deck of index cards on your table, in your car, or in your bag with activities written on them. Browse these cards when you are bored or need to find something to do with your kids. We keep a deck of cards in our car with ideas for childrens’ activities, and it helps us immensely.

Regular exercise also is a great way to prevent shopping out of boredom –- be it online or in real life. Use websites such as Meetup or Twtvite to find local people meeting around interests and passions.

7. Be rational – Emotional spending is almost always bad.

Every time I shop for food when I am hungry, I buy at least three items because my stomach (and not my mind) thought I needed it. I rarely shop when I feel low, but my buys prior to vacations are rather impulsive — a sign of my excited anticipation rather than fulfilling a need. A lot of my online buying decisions are often bad ones when they’re made under the stress of being late on a gift.

Be sure to understand your types of emotional spending. Most often, just understanding those patterns help you become more rational.

8. Be creative and flexible – There is very little you absolutely need.


Photo by M.A. Enriquez

Shopping with two little kids is incredibly hard. That, in turn, has made me rather creative. Before, I’d run to the store with a list of things to buy -– complete with art kits for every little project I had. Only recently have I realized how much I was spending by not re-purposing the craft material I already had.

These days, I heavily improvise with cooking recipes and crafts for kids. I often use our recycle bin as a craft resource. It is a lot more fun for the kids to find craft material at home than out at the local craft store.

9. Think experiences – Enrich your life without the “stuff.”

Buying gifts is great, but I have recently started gifting experiences to myself and the people that matter.

Make videos for people and share them online. Create a photobook for family and friends after they have visited you. Life gets richer with experiences, rather than commodities that cost money and pile up the junk at home.

10. Negotiate – Understand that you have a right to save your money.

Negotiating is not about fleecing another person. You have the right to seek out a good deal. Negotiating is not the same as haggling –- you lose nothing and often save more than a few pennies to put back into your savings account.

What tricks do you use to prevent yourself from overspending?

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Comments

  1. #11 Be careful at sales… lol. I think that is our biggest pitfall. MIL calls and says so-and-so just slashed the price of the dashboard GPS holder! So DH goes running online to get it. Yes, he saved $30, but he spent $15 to get the thing that we didn’t need – we have a window mount that came with our GPS (which was a Christmas gift). Unannounced sales get us. Oh! That’s a good deal, I should get it! When the item(s) come home, it just sits unused. Very good list, by the way :-)

    Kristin´s last blog post…Don’t Throw Those Bananas Away!

  2. #12 Use common sense. If the price seems to be too high for the item you were going to buy, then it probably is.

    And from my personal experience, #5 (Save first, spend later) and #10 (Negotiate) are responsible for the amount I have saved :) These are awesome tips. And a great post!

    Emma @ Baby-log.com´s last blog post…Toys That Last – Tiny Love Fruity Pals

  3. #13 Stay out of the stores. The only stores I regularly hit anymore are Trader Joe’s and the farmers market. We hold out as long as possible on purchasing items and wait until we have saved up for that item and then intentionally go to a store to purchase it, and nothing else.

    Great tips!

    Shannon´s last blog post…The Benefits of Fermented Food: Lacto-Fermented Vegetables

  4. I’ve never been a shopping fan, but I think what is more tempting to me is the spending on treats like Starbucks – because I can feel like I “deserve” it.

    Having little people with me all day has curbed that spending tendency as well, though!

    Jamie

    steadymom´s last blog post…Rest for the Weary Mother – The Physical

  5. Clean out and declutter regularly. When I clean out rooms and spaces in our home, I try to remember how much I spent on each item. Recalling how the cost of the item and its short life and service to our happiness helps me be more aware when I go out shopping again—trying to see each new shiny piece of anything as its goodwill counterpart in my closet or toy box one day helps me focus on what’s really necessary.

    Nicole´s last blog post…Packing List…Redeemed

  6. One thing you said that hit right on with me…the more spending money you have, the more you’ll spend. You’re SO right on that. If I have “personal” money, I am gonna spend it. I really need to re-evaluate sometimes because I’ve gotten by on a LOT less…

    Jill´s last blog post…Shred Level 2

  7. Can you give us some ideas for that index card pile you talk about in number 6? Thanks!

    • Hi Molly!

      When we moved to our city a year ago, we got a pile of index cards and started writing a child-friendly activity/place to visit on each card. We did a bunch of research online and came up with names of various parks, museums and so on. Some things on our cards are –
      Main City Library, Pier, Japanese Garden, Glass Museum and so on. We kept one activity on each card. We bundled them in an elastic and put them in the car. Over time, we have added more specific info about these places/things-to-do on the cards such as free/$, timings(closed Sat) etc.

      We are a very spontaneous family BUT try to do a couple of things as a family every week. For example, we go to a friend’s place for brunch and then we decide to do something fun outdoors cause the day is great. At that point, we just go over this pile and decide on something to do! That way, there really is no time wasted deciding – or hanging out. The kids participate in the decision making too – but they tend to choose the zoo over and over again, lol!!
      Let me know if you find it interesting and plant to use it :)

      Maya´s last blog post…Are you rich but unhappy? Or poor and happy Or something else?

  8. Great list! Along the lines of #8, my task right now – finish what I started. I have ideas for projects around the home I’d like to start, yet there are at least 3 or 4 things I have started or purchased things for in various states of completion. It’s just more fun to dream up the new thing, and buy things for it, than it is to finish the “old one.” Lately, my husband and I have both been strict with ourselves about finishing the projects we already have. The materials we need are “free” – we’ve already spent the money, now we need to spend the time.

  9. Okay, we have been in the UK in the last two weeks and all the very large supermarkets, nice little shops etc made it very hard for me, not to spend all my money there. A lot of things were cheaper than in Germany, so that I save some money on the other hand. Perhaps it helps saving money, when you spend your holidays on places without interesting shopping possibilities.

  10. Great suggestions! Our house has been living on a smaller income and I find now that after a year I don’t even want to go shopping and like to make do with what we have. Also, why not try bartering/ trading for what you need with skills you have or things you no longer want?

  11. Excellent tips! One I use for sales is asking myself if I’d pay full price for a sale item. More often than not, the answer is “no.” Then I realize I don’t really need or want it, I’m just attracted to the bargain!

  12. Great tips. I couldn’t have said it better myself!

  13. I wanted to add one more marketing trick I learned years ago… You have to let yourself be aware of the actual price that’s blaring in front of you on the big board shouting “5.99″. My mother in law is one of the most perfect examples of this. She’ll tell you quick “It’s only 5 dollars!” And I have to remind her no, its actually SIX dollars!. Marketers have used this to rope people in for years and years. I can’t remember the exact way it was explained to me anymore, but it has something to do with our mind seeing the 5 and disregarding the .99. So we look at it as a dollar cheaper than it actually is. That one dollar makes a big difference sometimes!

  14. I use the Amazon wishlist feature for things I “want” but might not need. If after a few weeks, the item still has use and an appeal — then I can shop around for the item. Many times (!!!) I will find something along the same lines at a yard sale or in a thrift store for a fraction of the price.
    The wish list is also helpful to keep track of birthday present ideas (again, often found later at a consignment sale) and books to read (which can be requested from the library).
    Often the impulse of want + internet access = unneeded purchases. So if you can put the impulse items in a cooling off bin….then they can be reexamined.
    And staying out of the stores….that’s important without a doubt.

    • True Marie – my Amazon shopping cart is full of things that I want to “Save for later” . It really really works – I don’t want it after a while!

  15. Maya, my husband and I were actually ‘planning’ to get some shirts under the ‘buy 4, get 5′ tag. You know what? It’s brilliance is in the fact that it doesn’t ‘occur’ to the customer if he actually needs those extra shirts!

  16. @Marie, I do something similar with Half.com. I use it for my book addiction. I look at the lowest price someone is selling it for and then half that number (at least) and put it in the “highest price willing to spend” box. Half notifies me when someone lists an item for that price or lower! The only thing I have to watch for is shipping… a 99 cent book can quickly turn into a $3.99 purchase, but most of the time it’s worth it!

  17. Great suggestions!! It’s so true that when you see a sale for by four get one free you get the four instead of the three because it’s a deal. Stopping to think, do I need this is very important! I have recently planned out the meals for the week and looked in my pantry before going shopping and my food bills are definitely less. I do spend less in the supermarket though when my kids aren’t with me too! Because they are always asking for things and sometimes that one treat turns into two as I try to make it through the store with two kids and a cart full of food, lol!!

    Great post! Thanks!

  18. avatar
    Evelyn A Pearl says:

    One thing that I do (when I remember) is I will browse at a bookstore and write down names of books I want to read. I then allow myself one or two books at store and look for the rest at the library. I have been trying to keep a running list. I love books and I will read them over and over,but this does help to curb the amount of money we spend on books.

  19. I am one who enjoys the thrill of bargain hunting a bit too much. I’m sorely tempted by coupons and rebates to stock up. But then I ask myself, “How much gourmet ice cream do we actually need?” I only need to look as far as my waistline to see the answer.

    Like Evelyn, I check the library before I buy a book. I don’t usually end up actually getting the book from the library, but knowing it’s available free helps curb the “gotta have it” impulse.

  20. I stay out of shops as much as I can or go to the same shops so I am less inclined to browse and buy impulsively.
    The other standard question I ask myself before I buy; “Where am I going to store this?” has helped too. Nothing more frustrating than not knowing where to put what you just bought.

  21. Thanks Maya…
    Your mention of 5 for the price of 4 reminded me of my mother. She is the QUEEN of impulse buying. She LOVES a bargain so much so that she’ll buy the product even though she doesn’t even use it !!!
    She’ll also buy clothes that are marked down and THEN someone to fit them. Bless her, this has been her spending pattern for over 40 years!!!

    Having had my daughter has helped me to curb my spending BIG time. With a tighter household budget and a little person who doesn’t give a hoot about shopping, it’s a winning combination. These days I’m less likely to impulse buy as we rarely visit the shops and when we do it’s for something that we have decided to buy well in advance.

    Great tips, appreciate it.

    Oh and when it comes to buying kids stuff, I swap our toys with friends. Ever notice how excited kids get when playing with someone else’s toys. Works a treat.

  22. I just discovered your website, Maya, and LOVE it. My husband and I have been using a budget to limit expenses for a few years now, but really only got our financial spending under control over the past year. What made the difference? Going to the envelope method. I used to spend hours each week working on both a budget spreadsheet and a banking software application and we never used cash – always the debit card (we never really were big credit card spenders). We were trying to be SO carefull, but it was still very hard to keep track of how much had already been spent in each category and how much we had left spend for various reasons (mainly it was not having the spreadsheet with me when I was spending money). But now I just do the budget spreadsheet to determine how much my expenses will really be and withdraw all that in cash. We keep a little portable filing system marked with each category (groceries, gas, etc.). You are right that you become alot more aware of how much you’re spending when its right in your hands. You see it and its tangible. And if you overspend in one category, it forces you to figure out from what other category the over-spent amount is going to come.
    .-= Vanessa Hake´s last blog ..Confetti Lariat (with TONS of Vintage Buttons) =-.

  23. Excellent ideas on how to prevent overspending. This can be used for all people, families and single adults. The one that always gets most people is the “but it’s on sale!” If you don’t need, don’t buy it, even if you can save $15 on it.
    .-= Lil Baby Cakes´s last blog ..9 Months Pregnant: The Home Stretch =-.

  24. The emotional spending point is quite apt – emotional spending is a habit that is hard to break. Sadness spending, boredom spending and inferiority complex spending in particular…

  25. I just joined a freecycling network in my area and it’s great!!! Like an online sale of free stuff others just want to get rid of. You don’t spend a dime! Well maybe on gas to drive over to pick it up.

  26. I love the idea of buying yourself a gift card to avoid overspending at a particular store- great idea!
    .-= Nicole aka Gidget´s last blog ..Friendships, Gifts of Grace =-.

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