Overspending has never been easier. In mere seconds from just about anywhere, you can mindlessly type and swipe your way to a pricey online impulse buy. And, surprisingly, overwhelming living expenses aren’t typically to blame for overdoing it with your wallet.
One NerdWallet study found that one in two Americans overspend, not out of necessity, but for emotional reasons like stress, excitement, and sadness. And the numbers are even greater for younger generations, with two out of three millennials admitting to emotional overspending and not sticking to a budget.
Self-awareness is the first step in avoiding overspending that’s driving you into debt. And if you’ve already taken the time to tidy up your money mindset, you’re well on your way. But there’s more you can do.
As you know, countless Americans are currently on a mission to declutter their lives and organize their homes. And we’re on a mission to help you tidy up your spending habits and manage debt responsibly. Here are our top tips for cleaning up your spending habits:
You know the first step in tidying a chaotic closet: You take a breath, reach in, and pull everything out of the darkness.
The same principle applies to your money. Face it: Most people don’t typically know where every dollar is going. And sometimes it seems as though big sums of cash just slip through your fingers.
So let’s get it all out in the open. Go back at least a few months in your records and get a complete view of where your money’s been spent. How much for housing? For food? For clothes? And how much for fun stuff? Gadgets? Retail therapy?
Create some general categories for the expenses you see and jot down the amount you’ve paid toward each.
When organizing that closet, there’s a magic question you ask when sorting through each item you’ve pulled out: Does this spark joy?
You can tap into that question’s power equally well when dealing with your spending. Just examine each expense you listed out from reviewing your records. Ask yourself: Does this spark joy?
Feeling uncertain when it comes to assessing your joy? Consider this:
> Pro Tip: These questions are great not only for evaluating your past spending, but for making future decisions as well. Next time you’re ready to pull out your wallet, ask yourself: Does what I’m about to do spark joy? And give your planned spending that double take it deserves.
You’ve seen the images in magazines, on Pinterest, and even on T.V.—immaculately organized drawers with clothing folded neatly and stood on end. And Americans are eating it up. No more piles of forgotten garments to sift through. With one glance, you have a total view of your tees and easy access to each one.
So give your spending the same magical makeover. With online account access and done-for-you expense tracking apps, keeping tabs on spending is a snap and use tools like the credit utilization calculator to help you out. Commit to a quick weekly review. Where has your cash been going lately? What expenses are coming up?
Choose a tool or system that gives you a simple, bird’s-eye view while allowing you to drill down on the details if you choose.
When you’re purging the clutter at home, you tend to tidy up in categories. For example, you don’t force yourself to dig through toys, clothes, photo albums, and paperwork simultaneously while organizing the attic. Instead, your start simple, say with clothing, working your way up to the memorabilia, which comes along with an emotional component.
You can tackle your habit of overspending in precisely the same way.
If you’re trying to cut back, start with one—and make sure it’s quickly actionable. Get rid of subscriptions and memberships you don’t use. Grab a coupon code before making your next online purchase. Or look into reducing your debt and lowering your interest rates. (After all, high interest rates are probably not sparking joy in your life!)
Wait for later to tackle the emotional spending decisions—like whether to slash your holiday gift budget or downsize your next vacation. For now, just keep your financial tidying efforts focused on a single spending category.
Until recently, organizing your home meant a marathon of physical and mental exertion. But today’s devotees of tidying up are Zen-like in their quest for harmony and balance—among people, possessions, and their environments.
And, while money stress is real, your approach toward spending should likewise be focused on balance. Too often, overspenders tip the scales to the extreme—purging every bit of spending joy from their lives and denying themselves even the smallest pleasures that come with a price tag. Or they fall off the wagon entirely by binge spending at the mall or a favorite online retailer.
Instead, aim for the happy middle. Remember that money isn’t the enemy. It’s there to serve you and your goals. Find that place of balance while tidying up your spending, and you’ll soon discover that your finances can spark joy and not live paycheck to paycheck.
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