How often have you pushed the “Order now” button this past week? Spending money is too easy. From our phones to our inbox to the coffee shop on the corner, it’s hard not to feel spendy. And as we rush from work to home and in between, it feels good to unwind at happy hour, despite the hefty bar tab at the end of the night.
Overspending is becoming all too common. Millennials have it bad, too. Not only are millennials burdened with nearly $1.5 trillion in student loan debt, but they have also become susceptible to credit card debt. Credit card debt has become the most prevalent type of debt among millennials, according to an NBC News/GenForward survey. When debt seems like it will go on for infinity, it’s easier to shrug your shoulders and spend anyway.
Not all is doom and gloom. Before you decide to rocket off to another planet to escape your financial situation, there is a way to optimize your spending. But first, it’s important to understand why you are overspending to begin with.
You replace contentment with spending
You overspend because you are replacing contentment with spending. Contentment in its simplest terms is finding joy. You can find contentment by opening up a good book. Running a hot bath and listening to your favorite playlist. And you can also find contentment in the moment spending on something you want.
Lauren Lane, a 29-year-old graduate student, ran up her credit card quickly this way she told The Money Manual. “I used to buy random things on Amazon because it felt good at the moment,” she shared. “I wasn’t paying attention to how much I was spending…My happiness levels were way off and I wasn’t sure why.”
When life decides to run us over with a Mack truck, our brains go to a quick-fix to solve our frustration. A quick run through Ulta or perusing Amazon daily deals helps us feel better about ourselves. But it’s only a temporary fix. Soon after purchasing that “thing,” we are back to our hectic routines, and our latest purchase is hidden in a drawer.
Your financial well being is linked to your personal well being
It is no surprise that when our bank accounts are full, we tend to be happier and more relaxed. When we let our spending run rampant, it affects our well being. Jobs suffer because financial anxiety fills our head. Relationships endure bitterness because we are worried about money. This can cause a crazy cycle. Financial turmoil causes stress in other areas of life which causes people to spend money to make themselves feel better. In turn, spending causes financial turmoil. See how this goes?
Financial well being and your personal well being are interlinked. Recognize all of the reasons why you are overspending. It could be because you are frustrated with other areas of your life. How can you address them without going into a spending frenzy? Find support in like-minded individuals who are going through the same thing. Talking about your situation with others can help you overcome overspending habits.
FOMO is real and it’s hurting our wallets
So your friends are going on a spur-of-the-moment trip to Vegas. Want in? We all have experienced that feeling of missing out. On one hand, you want to carpe the diem. On the other hand, you want to protect your ever-diminishing bank account balance. FOMO, or fear of missing out, can wreak havoc on our wallets.
Social media is a big culprit of inducing FOMO. Scroll through any feed and you’re bound to find that someone bought a new house or someone went on a trip to Thailand. It’s enough to make you feel down about your current situation. In this mental state, you are more likely to make rash financial decisions.
How to overcome overspending
Find fun and free activities you enjoy
Make a list of fun and free activities that you enjoy. Create a plan to do at least one of those activities monthly. “I love sitting around a fire in my backyard and my husband and I love Pokemon Go. It’s free and it keeps my spending at bay,” Lane shared.
Clean up your shopping triggers
Knowing your spending triggers is key to overcome overspending. Have a thing for Forever 21? Don’t go to the mall. Make it a game. If promotional sales emails from your favorite brand are cluttering up your inbox, use a service like Unroll.me. It is a free tool that rolls up all of your email subscriptions into one email. Then, that one email is delivered once daily. You can even choose what time of day it’s delivered.
Delete shopping apps like Amazon or Target if your phone can suck you into online shopping. Even apps that promote reward systems for spending, like Starbucks, should be deleted until you get back on track. Your cell phone not only is an avenue to spend, but it could be killing your productivity.
Track problem areas
Without thinking, what are three things you like to spend money on? Whether it is Amazon purchases or buying clothing, you know deep down what your unique problem areas are. A great way to address overspending is to track your spending visually. Create spending trackers for your problem area. Write down the date, place, and the amount spent each time you spend money in this category.
Eating out might be a problem area for you if you consider yourself a true foodie, but lack the budget for it. Before you make big changes, start by tracking how often you go out to eat. At the end of the month, count the number of times you went out and add up the total cost.
You can use this to set goals for the following month. You could make a goal to reduce the number of times you go out to eat or how much you spend when you do. In doing this, you can get creative while still having fun, and reduce your overspending tendencies.
Create visuals to stop overspending
In addition to spending trackers, a written budget and written goals will help you curb spending. Start by tracking your monthly income and expenses. If you have debt, you can start to track your debt payments by using a printable debt free chart.
Visual tools can help you see where your money goes every month. And it gives you the opportunity to make choices. That’s what makes a budget freeing, not constricting. Use an app, spreadsheet, or a whiteboard to keep track of your spending.
You may be surprised at your ability to control your spending and ultimately to save once you have these habits down.
Justine Nelson is the founder of Debt Free Millennials, an online community to help millennials get out of debt. Justine enjoys writing and speaking about all things personal finance. This Midwest millennial paid off $35k in student loan debt and now resides in San Diego with her husband living the DINK life (Dual Income, No Kids).
Feature Illustration: Laura Caseley For The Money Manual