How to Quit Spending More Than You Make


How much do you spend each day? Month? It’s a hard number to look at if you add up all of those stops for coffee and quick runs into the drug store. You need it. You want it. Yet, when it comes to paying the bills, nothing worries you more than not having enough money in the bank. If you are like many, you are tired of spending more than you make and having to deal with high interest rates on credit cards and loans just to get by. But, how can you stop the cycle?

Turning to the Income

Many people believe that if they are spending more than they make they need to get a different job, beg the employer for a raise, or work on finding a job to do in their spare time. There are some situations where it is necessary to be paid more. However, most people don’t need to earn more – but rather they need to learn how to spend wisely. Easier said than done, you say. If you give it just a month of sticking to a plan, you may find that saving money is far easier to do when you are spending less.

Create a Savings Budget

Many people have budgets. They know how much their mortgage, utilities and groceries are going to cost each month. You may have a specific budget in place designed to get all of your bills paid. However, have you factored savings into it?

Make saving money just as important as paying the mortgage. If you feel as though you are struggling to make ends meet, this one simple step, even if it is just $10 a week, will make a big difference in your mentality. It will help you to see that having money set aside, untouchable for anything but true emergencies, really does feel good. For many people, it is a type of motivation to get you to the next level.

Do a Financial Fast

Have you ever put yourself on an eating fast? For just a few days, you do nothing but drink water and eat very little, if anything. This is a great way to cleanse your body and to improve your overall health because it flushes you clean. At the same time, it resets your hungry and stomach so that you end up eating less even after the fast is over.

What about a financial fast? Here’s what to do:

  • Pay only your mortgage, utilities, food and any debt obligations you cannot avoid paying, such as taxes and insurance
  • Do not try and keep expenses. Rather, your job is to find a way to reduce the number of expenses you have
  • Find ways to cut expenses out completely. Instead of going to the grocery store this week, have a freezer week
  • For any purchase, you think you need to make, ask yourself if you really need it. Determine if there are any alternatives to purchasing it
  • Ask yourself, what the most cost effective way to make purchases you need to make. Instead of having a professional put parts into your car for you, get them at the junk yard and learn to do it yourself
  • When you are making any purchase or paying any bill ask yourself if you are really getting your money’s worth from this purchase. Is this $90 meal really worth it or can you make three, $30 meals at home instead?
  • Finally, ask yourself if you are better off saving this money than you are spending it

What does all of this do for you? It will help you to consider every single expense you have. Should you really eat a ramen noodle diet for months? No, of course not. However, you can give up those expensive meals out and start making foods from home.

Go to Envelopes

You just need to stop the spending now in some situations. Another plan for doing this is to use envelopes instead of using checks. For example, your paycheck comes in. You cash it. You place a specific amount of money that you have budgeted for every single thing you will spend on. This includes a separate envelope for the following:

  • Groceries for the month
  • Spending money for the monthly
  • Utilities for the month (some people even create separate envelopes for each individual item)
  • Gas money
  • Money for any other specific need you have

You can only spend the money in the envelope on the specific areas you’ve decided on. That means if you have $200 for spending money, you cannot borrow from anything else. Why do this? Because it can help you to quit spending more than you make. It helps you to live a cash-based lifestyle. That is critical when you want to reduce spending quickly.

What About Emergencies?

Emergencies can be one of the hardest things to deal with. How can you have enough money to pay for that emergency visit to the dentist or the repair to the car that gets you back and forth to work? It is all in the planning.

Setting up an emergency account is the route to take. By putting some money into a savings account and leaving it there, you can be sure that any emergency expense that comes up is easily paid for. However, there are some rules. This money should not go towards anything but a true emergency. You should also create a cash-based budget and stick with it.

Using cash instead of credit can help you to quit spending more than you make. However, it is up to you to create a plan that can really work for you and for your family’s needs. You can make the change, if you put the work into doing so.

  • Karla J

    I use a 12 month calendar..and place on it what can be expected to come due..and put aside a little to pay a future expense off instead of the installments..leaving me some fun money…occassionally.

    • http://www.freemoneyblog.net/ Free Money Blog

      Great tip Karla. I also like to put money aside that I can freely spend.