How to Stop Spending Money: 5 Tips to Try

But the truth is, if you already struggle to manage the money you have, earning more money won’t make your financial stress disappear. No matter how much extra cash you make, if you spend every penny each month, you’ll end up with nothing in your bank account, no matter how much you started with. This is why a lot of Americans still live paycheck to paycheck even after their income and assets increase.

How can you take control of your spending? These five tips for healthier spending patterns may help you take the first step to achieve your money goals and reach financial freedom.

1. Learn how to live within your means

Financial health depends on understanding how much money you have coming in and going out, and how better spending habits could affect your financial goals. A realistic budget can help you take charge of your finances and make better decisions about how you use your money.

Create a budget by writing down your income, your monthly expenses, and other essential expenses and areas you find yourself spending money. When you see the numbers in black and white it can be easier to identify your money habits and target the ones you want to change.

With your budget in hand, you can work to break the cycle of living from one paycheck to the next, struggling to save, and falling deeper into debt. You might even find that you can automate savings contributions to make saving money a habit. And maybe even have some extra cash to use for discretionary purchases.

2. Identify how to improve your spending habits

Review your budget and financial habits to see if your actual spending is aligned with your goals and priorities. You’ll also be able to learn how to stop overspending on stuff that you don’t really care about, need, or use. (This can really motivate you to change your spending habits.)

It’s far easier to make changes and realign your spending when you can pinpoint exactly what’s keeping you from reaching your goals. And it’s easier to stay accountable to those priorities when you make tracking your financial activities a daily practice. Try using an app or make purchases with your debit card to track where you spend your money.

Once you have a tracker set up, check it regularly. You can make a game of it and see how accurate your guesses are compared to what you actually spend. More importantly, the tracker will tell you how your current spending aligns to your budget.

3. Avoid impulsive spending

It’s hard to avoid overspending. Social media can often make us want things that we see others enjoying. “Buy now” buttons can make purchases easy. Credit cards offer a welcome convenience, making it possible to buy items even if you don’t have money in the bank.

Get in the habit of checking your tracker when you get caught up in the excitement of a potential impulse purchase. Consider whether the expense you’re considering fits in your budget or pushes you further from your financial goals. Keep in mind that when you have a lot of debt, small purchases may seem less significant, but they still add up.

A shopping list is also useful—if you stick to it. If an item is not on your list, ask yourself if it's a necessary purchase. Ask yourself if you can make the purchase with cash. If you must use a credit card for an impulse purchase, think about whether you can pay it off, or will you accrue the expense of interest on this purchase. Try to accept the idea that you could buy it tomorrow if, after some thought, you still really want it.

4. Take a mindful approach to reduce overspending

A mindful spending approach can help find a balance between the occasional treat and long-term financial responsibility. For example, you could make a note of the item or items that you want, and at the end of the month revisit the note to see if you still feel the same desire to purchase the item. If you do, make a plan to pay for it responsibly. Or perhaps you allow yourself to buy that sweater, order in dinner, or book a weekend getaway only if you have saved enough cash to pay for it without using a credit card.

5. Focus on debt reduction

After determining how much money you have coming in and going out, it’s time to explore ways to reduce your debt. One effective strategy may be debt consolidation. By combining multiple debts from higher interest credit cards, high-interest loans, or other bills into one set regular monthly payment, you may be able to save money on interest. In fact, 85% of surveyed Discover® Personal Loan customers said they saved money by consolidating debt with a Discover personal loan and nearly half said they saved an average of $428 per month.

Recognize that you’re not alone

If overspending has put you on course to high debt and insufficient savings, know that many others are in a similar boat. According to the Federal Reserve’s annual report on the economic well-being of U.S. households, nearly 40% of consumers could have difficulty covering an unexpected $400 emergency expense with existing savings.

While knowing that you’re not alone might help ease your anxiety, don’t let that become an excuse. So, pause before you buy, and be sure to check your budget.

Remember: you don’t own your income. You own only the part of your income that you keep. A commitment to live within your means, pay off your debt, and increase your savings could enable you to build meaningful wealth. This approach may help you sustain your financial health for the long run, no matter how much money you’re making.

Would a Discover debt consolidation loan help your financial situation? See if you qualify and check your rate and monthly payment.

Articles may contain information from third parties. The inclusion of such information does not imply an affiliation with the bank or bank sponsorship, endorsement, or verification regarding the third party or information.

The information provided herein is for informational purposes only and is not intended to be construed as professional advice. Nothing contained in this article shall give rise to, or be construed to give rise to, any obligation or liability whatsoever on the part of Discover, a division of Capital One, N.A., or its affiliates.

*ABOUT SURVEY

All figures are from an online customer survey conducted in September 2024. A total of 736 Discover personal loan customers were interviewed about their most recent Discover personal loan with 546 of them using the funds to consolidate debt. All results @ a 95% confidence level. Respondents opened their personal loan between January and July 2024 for the purpose of consolidating debt. Agree includes respondents who ‘Somewhat Agree’ and ‘Strongly Agree’.