Am I Overspending? How Do I Stop?

Overspending can happen to anyone, often without even noticing. Small purchases, recurring subscriptions, and impulse purchases can quietly pile up, especially during the holiday season. But if you learn to recognize overspending habits, you can start to build a healthier financial future.

When your bills outgrow your income

 If any of the three things apply, that's a big sign you're probably spending too much:

• You've maxed out credit cards
• You can't save money for short-term goals or long-term goals (such as retirement)
• You're struggling to pay all monthly bills

Here are some easy areas you can cut back:

• Cell phone service – See if your provider carries a better deal or consider switching to a cheaper plan from another provider.
• Subscription services – Review and cancel any subscriptions that aren't necessary. You can always re-subscribe if you want after you have lessened spending in other areas. 
• Memberships – Similar to subscriptions, cancel any memberships you don't need.
• Landlines and cable –Rely on cell service and Wi-Fi for TV and calls. Most households don't use landlines or cable packages when you're trying to save money.
• Annual credit card fees – Annual fees can add up, but not every credit card has them. Ditch them for one that has no annual fee instead.

Recognize impulse spending

Adopt a budget if you struggle to avoid impulse buys and commit to sticking with it. When you go out to stores, create a list of what you need and don't stray from it. Spending only a few minutes using a budget calculator can help you digest how much money you really can afford to spend every month.

It could also be helpful to erase any credit card information saved to online shopping accounts—typing your number each time for online purchases forces you to stop and think about whether you really need it.

Unknowingly overspending

With all of life's demands at home, work, and school, it can be easy to miss signs you're overspending.

One simple way to make sure you're in the clear is to do research before you buy. Assess all available options and see how they stack against each other in terms of price, quality, and user reviews.

Asking these types of questions before some common purchases can put you on the path to better financial health:

• Do I need to buy a big-name brand? Or can a smaller-name brand work just as well?
• Can I buy a used or second-hand item to fulfill this need instead?
• Can I make this meal myself with food items I already have or by buying them at the store, instead of going to a restaurant?
• Have I forgotten about anything in my closet/food pantry? Or do I have any alternatives stashed away that I may have forgotten about?

If this all feels like too much, that's OK. Just start with baby steps—a little progress is still progress and money saved wisely.