What Is Not a Good Way to Prevent Unnecessary Spending

If you are looking at ways to prevent unnecessary spending, just buying on a whim is not the ONLY reason why you tend to go over-budget. There is a saying in the personal finance world “you can afford anything, just not everything”.

So, if you properly budget and are good at finances, you can actually achieve a lot with the money that you have. Let’s delve deeper and see more ways to prevent unnecessary spending:

What Is Not a Good Way to Prevent Unnecessary Spending

Preventing unnecessary spending is crucial for maintaining a healthy financial situation. However, some methods are not effective or advisable for achieving this goal.

Here are some examples of what not to do:

Ignore Your Finances

Ignoring your personal finance problems won’t make them go away. Not keeping track of your spending or avoiding looking at your bank statements can lead to overspending. Awareness is key in managing finances.

Impulse Buying

Making purchases on a whim, especially for expensive items, without considering your budget or needs can quickly lead to financial trouble.

Conquering the urge to impulse buy requires cunning and proactive strategies. Before hitting that “buy” button, implement the “24-hour rule” to let the initial excitement simmer down.

Planning your spending with a budget and shopping list keeps you on track and reduces the risk of spontaneous splurges.

Identify your personal triggers like stress or targeted marketing, and develop coping mechanisms to avoid falling prey to them.

Unsubscribe from tempting emails and resist the siren song of deals and discounts. When faced with a potential purchase, ask yourself key questions: do you truly need it, can you afford it, and will it see regular use?

Using Credit Cards Irresponsibly

Relying too heavily on credit cards without a plan to pay off the balance can lead to high-interest charges and debt accumulation. Use your credit card to raise your credit score and beware of these credit card mistakes

Failing to Budget

Without a budget, it isn’t easy to understand where your money is going and to set limits on your spending. As soon as you start tracking your expenses and income, you’ll notice trends, issues with your spending and ways to save money each month. (Read more: 100 Ways to Save Money)

Not Having Savings Goals

Without specific savings goals, it’s easy to spend money that could have been saved for important future needs. Start small, think about saving $500, for instance, to create an emergency account.

Then move up to at least $1,000, to make sure you are covered for any surprise expenses that would get you offtrack. Always set up goals and a deadline to achieve them.

Cutting Costs Too Aggressively

Overly strict budgeting can be unsustainable. It might lead to frustration and eventual splurging. Don’t punish yourself too much. Start new financial habits that you can keep for ever, don’t be too ambitious at first.

Make sure you are allowing yourself to enjoy your money, just as you start saving more aggressively. It’s a lifetime commitment, make sure you can keep it.

Neglecting to Compare Prices

Failing to shop around or compare prices before making a purchase can result in spending more than necessary. Always look for better pricing. Now, when shopping online, it’s even easier to track price changes and find better deals.

Don’t just stick to Amazon. I have bought way cheaper at Walmart or Target, for instance. And, since they also deliver to your address, it’s money you save and not overspend.

Not Reviewing Subscriptions and Memberships

This one is a doozy. Regularly paying for services you don’t use or need can drain your finances. Just go check your subscriptions now and you’ll notice you have paid for stuff you don’t really need or use.

Just a glance over my transactions list in the past 3 months showed me at least 5 subscriptions I no longer needed. And, of course, I was paying for them. Quick 200 bucks saved every month from now on.

Ignoring Financial Education

Not learning about personal finance and effective spending strategies can lead to poor financial decisions. Today there are countless personal finance blogs you can read, podcasts you can listen and even TV shows geared toward managing your money.

Learn daily and improve your financial decision-making.

Emotional Spending

Using shopping to deal with emotional issues can lead to unnecessary purchases. Going shopping when hungry or angry is also a great way to overspend. The best way to avoid this is to shop with a list (and stick to it).

Not Tracking Small Expenses

Small, frequent purchases can add up over time, but they are often overlooked. The best way to counteract it is to use one of the best budgeting apps available on the market today.

Not Having an Emergency Fund

In all my experience, the most financial hardships came from not having an emergency fund. And no, using your credit card to cover unexpected expenses doesn’t qualify as an emergency fund.

Without it, unexpected expenses can force you into high-interest debt. So, the first step in getting back on track, financially, is to start saving some money.

A quick way to create an emergency fund is to try and sell stuff around the house. You can start a yard sale and even try scrapping a washer and dryer for extra money.

Peer Pressure and Trying to Keep Up Appearances

Spending to keep up with friends or trends can lead to unnecessary and unaffordable purchases. If you keep up with the Joneses, you will soon get into money trouble.

Always think about YOURSELF, when it comes to purchases. What do you actually need? Can you live without a certain purchase? Can you get a preowned one?

Not Considering Long-Term Costs

Focusing only on the upfront cost of a purchase without considering long-term expenses (like maintenance, repairs, or additional accessories) can lead to higher overall spending.

It goes mainly with new cars and super-expensive houses. You can be happy in a smaller house, which won’t cost you so much in taxes and maintenance. A new car is cool to have, but it’s losing value the moment you drive out of the dealership.

There are many preowned options that cost you a fraction and maintenance is less expensive.

Overusing Sales and Discounts

Buying items just because they are on sale, even if they are not needed, can result in spending more money overall. Take Black Friday or the countless “sales” every store has almost on a monthly basis.

Do you really need to buy? Are you just falling victim to sleek marketing?

Plan your purchases carefully and only buy when you need to. Just buying on sale doesn’t mean you save money. In some cases, you’d better pay full price and just purchase based on real needs.

Relying Solely on Willpower

We are as strong as our planning is. To rely solely on your willpower, when it comes to money is a sure way to fail. This is why we have payment apps, expense tracking systems, various budgeting options.

The better we plan and stick to our plans, the better we are doing financially.

Avoiding Accountability

Accountability buddies. Got one?

If not, just by keeping track of your expenses and trying to budget will help you see where you stand every month and how to improve. If you also have someone around who can be a sounding board for your finance ideas, even better.

Discuss your problems and what you’d like to do to solve your money issues. Then check back every once in a while to see how much you have progressed.

Punishing Yourself for Spending

Restricting yourself too much or resorting to harsh punishments like depriving yourself of basic necessities can lead to unhealthy relationships with money and make it harder to maintain sustainable spending habits in the long run.

You are human, you will overspend or make bad money decisions. Learn to forgive yourself, understand why it happened and move on.

Completely Eliminating all Spending

While cutting back on non-essentials is important, some spending is necessary for a healthy and fulfilling life. Depriving yourself entirely of things you enjoy can lead to frustration and dissatisfaction.

Obsessive Tracking and Analysis

While tracking your spending can be helpful, fixating on every little detail or analyzing your spending to the point of anxiety can be counterproductive and take away from the joy of living.

You need to keep a budget and track your expenses, even if it’s on a category basis mainly (you’ll see that you spend 500 bucks on gas, for instance. Or $2,500 on eating out). With budgeting apps now tied to your bank account, it’s super easy to view your transactions and spend maybe 10 minutes a month looking at your category spending and trends.

Don’t go crazy analyzing, just try to understand some core concepts and trends. Then make adjustments.

Cutting Off Social Connections

Avoiding social activities or relationships to save money can lead to isolation and loneliness. Find ways to enjoy social activities without breaking the bank, such as hosting potlucks instead of going out to eat.

If your friends tend to “force” you to overspend, then maybe you need to reevaluate your friendship. They should understand your willingness to improve your finances and support you during this change.

Taking on Extreme Financial Risks

Desperate attempts to save money can lead to risky financial decisions, such as gambling or investing in risky schemes. Stick to tried-and-true methods of saving and investing.