How to Rein in Excessive Spending

Keeping control of finances is essential for a healthy work and home life and to live within your means. The trick is knowing where to start, but once you start a deeper evaluation of your spending you might find a host of ways to reduce costs or excessive spending. Here's how to get some control on excessive spending and how to trim costs in other ways.


  1. Image titled Rein in Excessive Spending Step 1
    Find out what you actually spend. You might be aware of an excessive spend, but how excessive is it? Write down all your monthly income versus monthly expenses and see where the problem or problems lie. Start with your income and write how much you earn per week or per month after payroll or income taxes. On the other side of the ledger, write your expenses such as food, fuel, utilities, equipment, clothing etc. Balance each total and see if you are in the red (overspending) or in the black (in credit). If you do forward planning, estimate costs in line with inflation to see if you need to increase your income by getting an extra job, or charging more for your services. If you find that your expenses are reasonable, such as for home use your fuel, grocery and other home or utility expenses are not out of proportion to the amount of people in your home, then look to the other non essential expenses. But work out the limit, if in a business context reducing expenses means reducing staff, look to how you can reduce wasted time instead and use that time better for generating new business. Simply cutting staff and staff hours is cutting your business's ability to grow and act. Check with your accountant for more ideas and suggestions. People often avoid accountants like they avoid the dentists chair but this doesn't help fix the problem. They are great for pointing out the problems you may have missed and give good constructive advice. A good accountant is worth their cost, get them to demonstrate how their advice will save you money.
  2. Image titled Rein in Excessive Spending Step 2
    Plan all your shopping needs. if you have a project that requires additional tools, factor those in to the amount you have to save or spend prior to doing the project. If necessary borrow or hire the tools if they are prohibitively expensive and DIY if it will not affect the safety of the end project. Buying in bulk sometimes does give a better individual price, but only use it for high consumption items. Otherwise it hits your cash flow that could be used for other essentials. Work out if you will be buying stuff that sit on a shelf for more than a reasonable period. Cut a balance. The whole goal is to work out what you can cut out entirely, what you can reduce a little of and what is not practical to cut. You may have make sacrifices. Shop around for the things you do need. Phoning for several quotes or checking comparative prices with other people who have had similar work done can be a good way to find out if that contractor is really good value. The catch with building a good relationship with a supplier is if they aren't giving a value or quality performance, you end up feeling guilty about going elsewhere for a better price for the same product. Reward good suppliers with loyalty and discuss with them how to demonstrate you are getting a good deal. On the same token, if they are a smaller company but give better quality stick with them even if they are a little more costly. The trick to shopping around for projects or items is to use a tender system. Write down the requirements you need such as for getting some paving done around the home, that suppliers use the type of paver you select, that the ground is machine compacted first, the edges concreted and so on. By drawing up your needs and sending it by fax or email for a quote request to suppliers you can quickly find out the best rate and not go cheaper to end up with a poor quality job or product. Ask yourself how essential is it. It might be on special and a very attractive deal, but do you really need it? For home this might apply to an extra pair of shoes or clothes, or a new lawnmower or tool when you already have a good pair to use.
  3. Image titled Rein in Excessive Spending Step 3
    Don't sacrifice quality for cost. Cheap tools and equipment can be OK for small applications and small frequency use, otherwise don't waste your money on something that will keep costing you money. Saving a small amount on something that will last half as long does not make good shopping sense. Also don't be fooled by specials on non essentials and dumb logic. Money saved on a special price is not actually money earned as it is not new income and is just reinforcing poor spending habits. Its just money saved and that money can be more wisely put aside for the future, be it a future project, goal, holiday, education, retirement savings or as an emergency fund. The big problem is people who live to the philosophy that it is money earned will see nothing wrong in spending it on other things they didn't need and they aren't actually getting ahead. A small reward like a treat at a cafe, cinema or another low cost treat is fine within limits if you are still saving a surplus.
  4. Image titled Rein in Excessive Spending Step 4
    By the same token, if it is an essential thing, see if you can wait for a real special. Ask your supplier or local store if one is coming soon, but in many countries the end of financial year sale can be good value. It is actually seldom good value before special holidays such as Christmas, because stores often ramp up store prices and drop them again for the after holiday sales. Many large department stores get holiday special catalogues (which are genuine supplier discounts from their importers & suppliers) many months in advance of the actual date to buy in advance. The after holiday sales are not always true discounts to the consumer but an averaging of the pricing cycle. When confronted with signs like "50% off!" you should always consider how the stores are still able to make money giving such huge discounts. Department stores have higher profit margin on their wares, but the downside is their rent and staff wages is vastly higher than a internet based supplier who runs a warehouse with a fraction of the staff and rent cost.
  5. Image titled Rein in Excessive Spending Step 5
    Be mindful of psychology in your spending habits and to see how you can adjust your mindset to suit not only your spending but also your goal planning. There is a host of things to consider, such as:
    • It is not always better quality wares, but some people are often more happy to pay for the experience of the glamour of big department stores and their labels and to feel they are special, even when they know the price was higher. When it's a functional thing such as a new broom or other cleaning supplies, glamour isn't essential and people are more likely to look for the cost factor. Therefore consider how important the glamour aspect is. You can still visit these stores and look around even if you don't buy anything and they can even prove useful to learn to recognise what makes a quality item and a poor quality one, for new ideas and fashion that you can replicate or source elsewhere much cheaper, or just to get an idea of costs when you want to buy something in future.
    • Are you attached to the store or the people working there? It is important to consider why you want to shop and why you want to shop from the places you do. In many ways this is no bad thing and can actually work to your advantage or your well-being, but if you feel obliged to spend more, are easily tricked into a more expensive option, or if you can get better value and quality elsewhere, then the attachment can make it very hard to leave a bad spending environment. Therefore, still be disciplined (but not ruthless) when buying non essentials but shop wisely. This way you can still have the fun of shopping knowing you have saved something.
    • Consider peer influences or other pressures to spend, or where you may be inheriting someone else's problem. Quite often our friends or our standing in social circles is dependent on being able to spend money freely. This can quickly fall into a wasteful and meaningless relationship if our friends only value us for our money, so we gain more integrity when we are wise. Sometimes, you may be confronted with social responsibility to spend up to keep the economy going, when in reality your money can be used more directly to help others. When you look at the amount charities or non profit services get back in government grants from sales taxes per person, what may seem a small donation is likely more than what they get from government rebates per person anyway. So you can avoid reinforcing poor spending habits, but also gather some merit aiding a local community charity or service.
    • Consider if the credit or debit card is make it easier to overspend. Parting with cash is mentally harder than swiping a card, even though its the same money. Here lies the lesson... "Pain-free" shopping actually makes you spend more and you also pay interest. Pain-free therefore, does not really exist which you can bear in mind. Finally keep evaluating and checking. You may recover reckless spending if it was excessive to live within your limits, however if your limits aren't high enough, consider getting an extra job. Its actually much like dieting. Too much spending is like excessive eating, too little income is like too little exercise. Find out what you really need to do to have healthy finances. Like dieting also you might lose that weight, but if you go back to your old ways, so does the original problem.


  • Remember many of the things you buy today will be clutter within the week and junk within a couple of years. Take that money and invest it.
  • If you see something that costs more than $20, wait 7 days to buy (assuming is a want, not a need). Usually by the time the 7 days rolls around, you'll realize the item is unnecessary and you won't even want it.
  • If you save 20% of every dollar you make -- starting when you are a teenager baby sitting, you'll never want for anything in your later years.
  • Every purchase requires some sort of maintenance. You either have to clean it, insure it, move it, find a place to put it. If it's a want, not a need, you probably are better off without it.

Article Info

Categories: Buying Wisely