If you’ve ever looked at your bank account and thought, ‘I know exactly how this happened… but I still don’t know how to stop doing it’ — these tips are for you.
Most of us aren’t completely oblivious to our spending habits. We know we’re overspending or buying pointless stuff, we just don’t always catch it before it happens or our brain convinces us we need the thing.
The new dress, the nicer car, the bigger house. There’s always this sense that this next purchase will bring you happiness.
Sometimes it’s not even that we’re getting into significant debt to get this stuff we don’t need. I was at one point buying stuff I didn’t need every month, but I wasn’t using credit cards to fund it. That doesn’t mean it wasn’t overspending, because that spending held me back from my financial goals.
I had a bulging wardrobe of stuff, but I wasn’t being smart with my money. I wasn’t leveraging this money I had to build my wealth.
Let’s get into why mindless spending happens, how small habits and identity get wrapped up in spending, and, more importantly, how to actually shift it without making life miserable or boring in the process.
Your Spending = Your Identity
You’re not buying stuff, you’re buying a version of yourself.
We don’t waste money because we’re irrational. We waste it because spending helps us feel like the person we want to be. But when the stuff you buy isn’t going to fit into the life you actually live, it just becomes wasteful.
Let me give you some examples. You get hooked on the clean girl aesthetic trend, which means you have to get the candles, white ceramic mug, skincare minis, Stanley cup, quiet luxury wardrobe.
Or maybe you decide you’ll start going to the gym and the first thing you do is drop hundreds on clothes and trainers, but never actually manage to make attending the gym habitual.
You drop hundreds on beautiful stationery to start journaling but never find time to actually do it.
Because social media trends and aesthetics shift all the time, and they inevitably require a lot of stuff for you to get involved with them, the more time you spend online rather than living life in the real world, the more you’ll fall victim to this type of identity FOMO.
Before you buy anything that’s not a need, ask yourself: Would I still buy this if no one else saw it?
You need to budget for your real self, not your fantasy self. Try creating a “fantasy spending” list in the notes app on your phone.
Add things that appeal to you there and review it after two weeks. Viewing it with fresh eyes can help you decide if this really matters to you or not.
You’re Not Wasting Money the Way You Think
The leaks in your budget are not all the same. It can be really useful to identify the different types of drains on your budget, so you aren’t cutting out everything you love but you are reducing excessive spending and axing the stuff you really don’t need at all.
You need to identify wasted spending and excess spending. Here are some examples.
With wasted spending this is where you spend money and get nothing back at all.
This is the obvious stuff. The dumb stuff. The why-did-I-even-buy-that stuff.
Examples of wasted spending:
- Late fees because you forgot to pay a bill
- A subscription you didn’t cancel in time
- £30 of groceries you forgot were in the fridge
You usually feel the regret instantly. It stings. But the good news is that wasted spending is usually easy to spot and fix. It’s excess spending that’s trickier.
Excess spending is where you are overpaying for a real want or need
This is the one that gets smart people. Because it feels justified.
Some examples include:
- Getting takeaway 4x a week instead of learning new recipes to cook
- Buying 3 types of moisturiser when one would do
- Having a cleaner when you’re struggling to pay rent
- Paying £85/month for a gym you don’t go to because exercise is important
- Grocery shopping without a plan and wasting half of it
- You tell yourself you only live once, so you drop £250 on a new summer wardrobe just because, even though you have perfectly good clothes from last year
It’s not dumb spending — it’s just overdone. You’re still getting some value, just way less than what you paid for.
Wasted spending is obvious and painful. Excessive spending is invisible and habitual. And that’s the one quietly draining your bank account. Take a look at your spending for the last one to two months. If that all feels like too much, just keep a diary for seven days.
Try to spot areas where you spent a little more on essentials or non-essentials than you would like, then be brutal with the wasted spend and trim your excessive spending.
Add Friction to spending and remove friction from saving
If it’s too easy to spend, it’s too easy to waste. And if you don’t make saving straightforward and a priority, it’s too easy not to bother.
The process of spending money has never been easier, thanks to digital wallets and one-click online checkouts.
Small barriers to this process can equal massive results. The more time you can take to slow down your spending decisions and consider this purchase, the less likely you’ll be to go through with 99% of mindless spending.
Here are some things you can do to add friction to your spending:
- Delete Apple Pay from your phone – It’s at the lower end of the pain of payment scale, meaning it’s so easy to pay with Apple Pay you barely think about it. Compare it to cash which is at the upper end, where you’re physically handing over money. This is why a lot of people are trying cash budgeting now, because they can set aside a budgeted amount for say food, and that bundle of cash is all they can spend that week. It’s more visual and harder to overspend.
- Remove saved cards from apps and websites such as Uber Eats or Amazon. Anything that means you cannot just tap “pay” before thinking it through.
- Create a “Wishlist” tab in Notes with a 48-hour rule before you actually go through with buying something.
- Physically write the item and cost before buying. Start a list of all the stuff you’ve seen in one month and the cost. The amount may shock you.
Next make it easier for yourself to save and try to turn it into a habit. If your current account contains extra cash after your bills have gone then you’re probably seeing that as money available for your to spend on whatever.
If you have a set income, decide on a affordable percentage for saving and create a direct debit for pay day.
If you are tempted to spend some money on something you do not really need, transfer the value over to savings instead. There are so many great savings apps now that give you lots of options for gamifying savings, such as roundups, and also make it easy to add money. Find a great savings account that works for you – for example consider how many withdrawals you may need to make in a year – and use it. But mark it up as off limits for anything other than its purpose – such as a house deposit, your summer holiday and so on.
Saving isn’t about willpower. It’s about design. Your willpower can be a limited resource. Instead, create systems where it’s easy for you to save. If you are committed to saving a set amount, that in itself can have a positive impact on your mindless spending because you’re prioritising saving as a habit.
Make Your Environment Less Expensive
Your environment affects your money, both in your digital and physical spaces.
Change your digital space:
- Unfollow influencers who trigger spending
- Unsubscribing from all those companies spamming you with new products and sales
- Mute ads – you can change your advertising settings on Facebook so you’re shown less of the brands that really tempt you.
- Delete shopping apps and bookmarked shopping websites
Change your physical space:
- Keep snacks in your bag
- Bring your own coffee
- Have a “no-spend” day built into your week – This is a great mental reset to remind you that so much of mindless spending is stuff you don’t miss that much once you cut it out. You could even try a whole no spend month as a way to recalibrate how you approach your money.
- Organise your home so things are easy to find. This helps makes you love the stuff you have because they’re easy to get hold of.
Create a checklist
Part of the reason I used to overspend is that I didn’t really place much value on the stuff I was buying, That meant that I didn’t blink about getting something really similar or something that did pretty much the same job, or whether I was actually going to use it.
I think a lot of that attitude is down to just how normal shopping as a pastime has become, both in person and on our smartphones, and how much choice we now have. I think it’s still odd to wear a different outfit every day despite the proliferation of fashion influencers, but it’s not odd to replace your wardrobe when a new season arrives. That can lead to a huge amount of overspending.
Before you buy anything, try asking yourself some really key questions:
- Will I use/wear this more than once? Preferably at least once a fortnight.
- Do I already have something like this?
- Am I going to love it when I own it or am I reacting to a trend?
- Am I spending to solve a problem that actually exists?
- Do I want this because I want it or because I feel like shopping right now?
- Where will I keep this?
That last one is really key I think. If you’re already bulging at the seems with kitchen gadgets, is adding a pancake machine just going to pile on the problems for you?
Bin boredom
A big reason for spending money is boredom or the perceived lack of anything else to do. Scrolling is something we now do without really thinking about it.
Find other things to do with your time. Get a hobby that you enjoy and will pursue long-term.
One thing I’ve really tried to discipline myself to do is not scroll while watching TV. If a show is good enough for me to invest an hour of my time in, then I’m going to concentrate on that and not annoy my husband by missing plot points. So if I am watching TV, I’m not scrolling.
Read more books, get outside into the fresh air more for walks and space from screens and the temptation to shop.
Be clear on your goals
What do you really want? Your life goals probably don’t include copying that M&S clothing haul you just saw on someone’s Instagram feed.
Try to sit down and think about what you want your life to look like in 5, 10 and 20 years time. Where would you like to live, what kind of house, what job do you want to be in, when do you want to stop working.
These are things that only happen when we plan how we will achieve them financially. So it’s important to be clear what it is we want, then we can hopefully use that clarity to avoid wasting money and instead channel it to the things we genuinely want.
Once you know what you want, consider what you need to do to get there. I know I want to be able to help my kids through university without much stress over debt and borrowing and then help them with getting on the property ladder at some stage. This is a big goal, but I’m clear I want to try and so I am putting money aside every month to achieve that.
I also want to be able to stick with my current freelance work, but to facilitate that I need to have an emergency fund because my income is up then down then down again then eventually up again. If I am going to stick it out while my kids are in school, that emergency fund is crucial, I cannot afford to spend all my money every month, some of it has to go to the difficult months that sneak up on me.
I hope these tips give you some ideas for cutting back on your spending! For more ways to save, check out these frugal living tips.
