Overspending is an issue facing many of us. In fact, nearly half of Americans say their expenses are equal to or greater than their income—and for consumers ages 18 to 25, the proportion rises to 54%.

Staying within your budget isn’t always as simple as telling yourself to just stop spending money. Often, impulsive spending is emotionally driven or a well-ingrained habit, but you can get back on track.

We reached out to our favorite experts in personal finance to get their best tips on how to reduce spending. Check out their advice on seeing the bigger picture, keeping track of the details and managing credit cards.

Why do I overspend?

How to stop spending money

Live within your means

Make a budget and stick to it

Defer gratification

Stop overspending on credit cards

Why do I overspend?

People overspend for several reasons, but impulse purchases tend to be the biggest factor.  If you’re not sure exactly how much you earn each month and regularly charge purchases to credit cards, you might be overspending without realizing it.

When you pay for something using a credit card, you defer the pain of seeing money leave your hands. Even debit cards constrain your spending because you can’t buy anything that exceeds what you have in your bank account. With a credit card, you buy now and pay later, so you can delay the sting of watching your checking balance drop until another day.

 

How to stop spending money

While changing your habits can be difficult, experts’ advice will help you see the bigger picture, keep track of your money and manage your credit cards.

1. Live within your means

The impulse to overspend can be strong, but Bola Sokunbi of Clever Girl Finance says living within your means begins with self-knowledge and self-discipline. To stop spending money, you need to think about how this purchase will affect your finances longer-term. Is it worth having a nicer car if you’re constantly stressed about having enough to cover your rent?

Learning to ignore what other people do and find your own happiness can also lead to peace of mind and stability over short-term indulgences. 

“To spend less, you should take into consideration that true wealth involves learning to be content with what you have and not being envious of others,” says Brian Meiggs of My Millennial Guide. “Learning not to keep up with the Joneses is a great way to reduce reckless overspending.”

 

2. Make a budget and stick to it

Overspending becomes a habit when you’re not used to tracking your income and expenses. But you can combat this by setting a budget.

“The first thing someone needs to do when setting out to reduce overspending is to set up a budget,” says Sean Bryant of One Smart Dollar. “Without a budget, there is no way to know how much money is being spent each month.”

A budget helps you stop overspending because it puts all your purchases in context of your income and broader financial picture.

“Don't think in terms of dollars when making a purchase,” says Adam Juda of TapRun Consulting. “Think in terms of hours of work: A $50 trip to a restaurant may not sound like much, until you realize it takes three hours of work to pay for it.”

Juda also advises nixing credit cards altogether and relying solely on cash for all your expenses. “Constant trips to the ATM should make your spending rate more obvious to you,” Juda says.

 

3. Track your spending

Even with the best intentions, sticking to a budget can be challenging. In a study of 2,000 American consumers commissioned by Slickdeals, 74% of consumers said they budget, but 79% of those budgeters failed to stay within their limits.

If you find yourself overspending even with a budget, consider using a budget app to track where your money actually goes. “The average person probably thinks they know how they're spending their money, but the reality is most people can't account for every dollar they spend. [Budgeting apps make] it easy to track every dollar you spend from your various accounts, and it categorizes them so you can see exactly where your money is going,” says Eric Anthony of Houston on the Cheap.

 

4. Defer gratification

One of the best ways to stop spending money is to delay non-essential purchases, even for a little while.

Ogechi Igbokwe of OneSavvyDollar recommends having “me money” for when you do treat yourself. “The idea of creating a budget is not to ‘starve’ yourself, but to give yourself permission to spend properly while accounting for where exactly your money went,” she says.

 

5. Kick the credit card habit

Credit cards are a major catalyst for overspending. If you find yourself leaning on your credit cards more than you’d like between paydays, you may want to consider leaving your cards at home—or being even more extreme – cutting them up.

“The best thing you can do to reduce your credit card spending is to cut up the cards, of course. It's a time-tested technique to keep you from spending more,” says Hank Coleman of Money Q&A. But he acknowledged that’s not always an option.

If you don’t want to go totally card-free, you can give yourself some ground rules for using them.

“One of the best manageable ways to curb credit usage is to create a plan to only use credit for certain expenses,” says Greg Norris of The Credit Counselling Society. “I love the idea of only using credit cards for some of the regular but variable expenses in my budget so that I don’t feel guilty about using the card, as I know it is controlled spending.”

You can also reduce credit card overspending by forcing yourself to think about each charge, rather than letting them accrue. “If a recurring expense on your credit card is not absolutely essential, cancel it,” says Sam Schultz of Honeyfi. “If you feel like you really need it a month later, then start paying for it again. You might be surprised to find out how much you don’t actually need.”

If you want to stop overspending, you can start simply. Tracking your expenses and avoiding impulse purchases go a long way toward reigning in your costs, giving you a chance to understand exactly what you must spend so you can avoid going into debt.

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