Money Masters: Judgment-Free Tips to Curb Your Spending

If you’re trying to curb spending, be realistic about what you can and can’t handle. Here are a few options.

photo: SHUTTERSTOCK
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Cutting back on spending is one way to reduce debt. Carpooling, using energy-efficient lightbulbs and eating at home instead of restaurants are among the oft-cited tips for keeping money in your pocket. But some experts say something like depriving yourself of a daily latte, well-worn advice among personal finance columnists, isn't likely to make a huge dent in your budget. And, it can become like following a diet that's too strict: eventually you may feel so deprived you go on a binge.

“If you’re not dealing with the underlying problem of where your money is going, it can literally compound and get worse,” says financial planner Lara Dalton of Waldron Private Wealth. 

So how can you change your spending habits to avoid getting deeper into debt? If you’re trying to curb spending, only you know which method will work for you. While you probably should consider some behavior modification techniques, be realistic about what you can and can’t handle. Here are a few options:

One tried-and-true method to prevent yourself from overspending is to figure out how much you earn per hour. Then, when you’re tempted to buy something (other than essentials like groceries), do the math to determine how many hours you’d have to work to pay for that thing. Still worth it?

Dalton suggests putting yourself on a 30-day plan for any non-essential purchases. “Ask yourself, ‘Do I really need this new Kitchen Aid mixer, and will I still need it in 30 days?’ If you still need it, maybe you should buy it.” But that waiting period will likely keep you from making impulse purchases that you regret later. 

She adds that when she goes shopping she heads straight for the sale rack and is a devoted user of coupons. “I freaking love coupons,” Dalton admits. “People may feel embarrassed about using them, but if you shop somewhere a lot and they offer you incentives, why not use them?”

Financial adviser Benjamin Lodico recommends setting aside a free cash flow fund per month, and when it runs out, so do any indulgences. Although Lodico recommends aiming to have a free cash flow of $500 per month after basic necessities are met, even that can be a strain for a budget stretched thin. 

And, Lodico adds, this is where having a careful, honest accounting of expenditures comes into play. You’ll see what the spending side of the ledger looks like, and where you can cut things you really don’t need or use (the popular example is the unused gym membership that carries a monthly membership fee). 

Training yourself to think differently about spending will go a long way toward reducing unnecessary expenditures, says Lodico. “You don’t want to become a financial ogre and eat rice and beans for 10 years,” he says. “But understanding what a little bit of moderation looks like is important. Think of it like being late for your job: yes, you can do it, but the consequences will be serious.”