Yahoo Finance Money Expert Rachel Cruze Reveals How To Stop Spending Money
Rachel Cruze is an expert on building wealth, sharing her tips through a popular show and a New York Times bestselling book. If anyone can help you figure out why you can’t stop spending money, it’s her.
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Here’s what Cruze has to say on the subject.
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Rachel Cruze: Why People Can’t Stop Spending Money
Cruze’s first lesson is that there’s often more than one reason people can’t stop overspending. She highlights five factors that could be contributing to your situation.
Not Tracking Spending
If you don’t track spending, it’s hard to feel in control of your money. Cruze recommends listing your monthly expenses and grouping them into categories like groceries and utilities.
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This shows how much you spend on wants, needs and savings in an average month. You can take that information and use it to make smarter financial decisions.
Comparing Too Much
Cruze also warns against comparing yourself to others — especially on social media. These sites have made it easier to compare yourself to friends and influencers and then try to reach the lifestyle you imagine they have.
Comparison is the thief of joy and leads to bad purchasing decisions. Try avoiding it the next time you go on Instagram or TikTok. If you struggle to do so, taking a break could help.
Shopping To Feel Better
Next, Cruze says many of us overspend because we shop to feel better. Retail therapy wrecks budgets, but catching yourself before is hard.
One solution is swearing off spending on certain things in 2024, as Cruze has. Another option is giving yourself a limited monthly shopping budget. That way, you can enjoy going out and shopping without destroying your finances. You may have to spend more time at thrift stores and consignment shops, but vintage fashion is viable.
Missing Self-Awareness
You may also lack self-awareness around your financial habits. For example, you might not realize how much you spend on monthly impulse purchases.
Cruze says it’s easy to fall into bad habits when you don’t know your financial strengths and weaknesses. Tracking expenses is one of the most effective ways to build financial awareness.
Paying With Plastic
Finally, Cruze says many people still pay with plastic credit cards. She says we feel these purchases less because they don’t take money from our account.
Paying with cash is harder to do because you lose the money instantly. Cruze says ditching credit cards is a great first step toward spending less.
How To Stop Spending Money
Now let’s look at some of Cruze’s solutions to overspending. Here are her top tips:
Create a Plan
Spending less money starts with a great plan. Cruze recommends creating a monthly budget that you stick to. Your budget should cover basic needs like food, utilities, shelter, and transportation. It should also include the amount you plan on allocating to savings and your “wants.”
You can still spend money on things you don’t need while on a budget. But you should limit those purchases to a pre-determined amount so they don’t impact your financial wellness.
Shop With a Goal in Mind
Cruze recommends shopping with a plan in mind. For example, if you go to Target because you need shampoo, limit yourself to just purchasing the shampoo you came for instead of spending an extra $100 on home decor.
This helps you avoid impulse buys, which add up to thousands of wasted dollars. If you want to spend $100 on home decor, you can. Just make sure that’s your plan before you enter the store so that it fits into your budget.
Stop Wasting Money on Restaurants
Next, Cruze warns against spending on eating out. She says it’s fine occasionally but should be done sparingly. Otherwise, you can wreck your budget even if you only spend a little bit every day.
For example, some people buy lunch at work. If you spend $15 on it every day, that could be nearly $4,000 annually. Cutting back could be all it takes to fix your money problems.
Swear Off Debt
Many people feel they don’t have enough money to live a comfortable life and try to solve the problem by paying for things with debt. Cruze is vehemently against this, arguing that people should cancel their credit cards and swear off debt entirely. Doing this will make overspending much harder since you won’t be able to put purchases on your card without having enough money in your account.
When you have no debt, you also have no monthly payments. This can free up room in your monthly budget to spend more on the things you love.
Delay Gratification
One of Cruze’s most important advice is to work on delaying gratification. She says that instead of buying what you want immediately, put it off for 30 days. Doing so will help you assess whether you need the item or if you were shopping emotionally the first time you wanted it.
If 30 days pass and you still feel strongly about making the purchase, you’ll be able to do so without feeling guilty. Delaying purchases like this gives you the time it sometimes takes to figure out what your family needs.
Final Take
Cruze has a lot of good advice to share about cutting back on spending. From delaying major purchases for 30 days to canceling your credit cards, she shares plenty of actionable takeaways that can improve your financial life.
However, discipline and self-control are still very important. The more you can bring these traits into your financial habits, the easier it’ll become to stop overspending.
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This article originally appeared on GOBankingRates.com: Money Expert Rachel Cruze Reveals How To Stop Spending Money
