First Person: How I Got My Spending Habits Under Control

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In many ways I feel as though I have been conditioned by society to overspend. Financial experts talk about how the economy would improve if consumers would start spending again. While it's true spending can boost the economy, it's rarely boosts my own personal financial situation. I had to learn to reel in my overspending habits in order to increase my net worth and build a small nest egg.

Keeping a spending diary

The first way I was able to get control of my out-of-control spending habit was to start recording my purchase. I wrote down everything from the $200 cable bill to the $20 restaurant bill. If I was in a hurry, I'd just grab the receipt and tuck it in a special envelope. At the end of the day, I sat down to find out my grand total. Just by facing the reality of what I purchased for the day, I was motivated to curb my spending.

Writing down my wants versus needs

My next step was to make a list of every thing I need to survive including food, housing costs, utilities and gasoline. Then I wrote down a list of everything I want including entertainment, clothing and gourmet coffees. Learning to distinguish between the two made me feel empowered. I only need a few simple things to survive, and the rest of the money I'm spending could be diverted into savings.

Avoiding the temptations

After figuring out where I waste my money, I decided to stop frequenting the stores and malls where I would be tempted to spend. I also noticed that I tend to spend more when I hang around certain friends. I call that peer pressure spending. Instead of eating out with my friends who are spenders, I switched to free activities such as hiking and getting together to work on sewing projects.

Holding me accountable

I knew I'd never stop overspending unless I found friends and family members who were wiling to help me reign in my desire to shop. I had a big money talk with my husband, who is also a spender. We agreed to hold one another accountable by cutting up our credit cards and sticking to a cash-only allowance each week.

As we eliminated all of our credit card debt, I had a great sense of relief. Now, instead of watching all of our money vanish, we actually had hundreds of dollars leftover. Sure, we spend some of it. That's our duty as Americans. But we also save 10 percent of our income for the future.

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