Spending Too Much Money?

by Bob Walsh

Are you spending too much money? In this article you will learn 7 strategies to spend less money.

What are you missing out on?

Here’s a simple mental trick that I learned from behavioural economist Dan Ariely, who wrote the great book Predictably Irrational.

manage money

Let’s imagine for a moment that you want to buy this new, supercool smartphone. Let’s call it the myPhone 6. The thing costs $800.

Now before you actually make the purchase, ask yourself this:

If I buy this cool myPhone 6 now, what will I miss out on?

Now don’t just compare it to another smartphone. Don’t just say: “Well, if I buy the myPhone 6 now, then I will miss out on the Samfunk S4.”

Compare it to something in a completely different category.

For example, say:

“If I buy this cool myPhone 6 now, I won’t be able to go on that trip I was planning. Or I won’t buy that new laptop. Or I can’t have that digital camera that I wanted to buy.”

This will help you to put things in perspective.

Pay in Cash

Another little psychological trick is to not pay with your credit card, but instead deduct cash and then pay in cash.

Believe it or not – even though in both cases the amount you pay is the same, it feels very different on a cognitive level when you hand over a stash of cash like that.

10% Rule

Whenever you get money, put 10% away immediately – this is money that you save and never touch. Put it into a separate bank account and never withdraw money from that account. If you want you can set up this account in a way so that you need the signature of another person in order to withdraw money – this will help you from impulsively using that money if you feel you need that extra obstacle in the way of your shopping addiction.

Stack it in Envelopes

When you get your salary, withdraw it and put it in separate envelopes. On one envelope you write: groceries. And you put the amount of money inside that you’ll use for groceries.

On another envelope you write “rent & utilities”, on another envelope you write “clothing”, and so on – this way, you separate your budget into different expenses. And yes, it’s a good idea to have one envelope where you write “irresponsible squandering” on – just make sure that you can afford the money you put into this particular envelope.

Get a Counsellor

You can get a free appointment with a credit counselor from the Association of Independent Consumer Credit Counseling Agencies.


While I usually don’t recommend procrastinating – it can be a good idea to procrastinate before you spend money on something!

Just delay making the purchase for two and three days. If at that time you still want it so badly and think it’s a good idea, go for it. But many times you’ll find that the desire for something is only temporarily.

Reprogram Your Subconscious Mind

Ultimately the reason why you are spending too much money is because you don’t have conscious control over it. It’s some part of your mind that is making you spend all that money, but that part isn’t really that part that you can tell what to do.

Hypnosis can train your mind to become a money master. Try out these hypnosis downloads to stop overspending and start accumulating money and wealth.

{ 2 comments… read them below or add one }

jason April 7, 2013 at 1:46 am

But at least with a credit card I get points, and the price that I pay is still the same!

Bob Walsh April 7, 2013 at 2:27 am

Yes, the price is the same, and even thoough you’ll accumulate some extra points when credit cards, the visceral experience of actually paying with cash will give you a more realistic feeling for how much money you are spending. This is important when you’re overspending, because it shows that you don’t have a good sense for your financial actions. Will paying in cash be the only thing you need to do to stop spending too much money? Nope. Probably not. But will it REDUCE the amount of money you spend? Yes, it will make you spend less.
That’s in fact one of the reasons why you don’t play with cash in casinos, but instead with chips – of course, you exchange your money into chips first, but once it’s chips, it’s somehow one more layer detached from reality, and people gamble with higher stakes (and lose more money).

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