How to Stop Spending Money You Don’t Have

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You’d think having no money would stop a person from frivolous spending but I am living proof logic doesn’t work like that. Today I’m sharing five super simple tips I used and you can too, to learn how to stop spending money you don’t have and ultimately stop getting into debt.

When I graduated college I was broke as a joke and my friends wanted to take a cruise to celebrate so I said “I don’t have money guys, sorry.”

Just kidding!

I took out an American Express credit card!

It wasn’t until years later I would realize how important and possible being out of debt is and would start to work toward it. That led to my husband and I paying off $78K of debt in less than two years making well under six figures between us.

Stop Spending Money You Don’t Have

If you’re struggling to stick to a budget, living paycheck-to-paycheck, and trying to break free of the cycle keeping you in debt, then these five tips can help.

Create a budget

Record what you have coming in for the month, what you have going out, and what you have leftover. If you’re living paycheck to paycheck you might believe that you’ll have nothing leftover but I promise I’m 99% positive you will.

If you’re struggling with sticking to a budget watch my video on How to Stop Spending Money on Unnecessary Things it’ll give you some tips to curb your major budget busters. And if you want more videos on sticking to a budget and controlling your spending subscribe to Modern Frugality on YouTube and like this video so I know what topics to cover and you’ll be them when they’re out.

Use cash or gift cards

You’re probably familiar with the cash envelope system that’s a great way to ensure you only spend what you have.

If you’re not comfortable carrying cash then I love using gift cards. Gift cards are great because they only work in one place so you can’t pull from the gas envelope to spend more at the grocery store, etc. They’re also typically safer and more sanitary.

You can actually buy discounted gift cards from Raise.com that not only help limit your spending and ensure you’re spending your money where you said you would but also gives you a little extra to spend. Use my referral code in the description and you’ll get a free $5 to spend at raise.

Shop with a list

When you do shop, always make a list and make it a rule that if it’s not on the list it cannot be purchased. You can put anything you want on the list but it has to stay there until it can be included on your next monthly budget. Again, the budget is not restrictive, it just shows you what you are capable of. Unfortunately, we’re not as rich as we want to be but that’s not the budget’s fault.

One trick to combat off-list/ off-budget spending is to download the Icebox extension.

Icebox is a free Chrome extension that replaces the buy button with a “Put it on Ice” button or appears as a pop up at over 400 stores. Once you put something on ice you are only able to purchase it once the thawing period is over. You set that period, I recommend 30 days, it gives you time to put it on next month’s budget and hopefully a little extra to make sure you really want it. 

You can exclude certain stores and if you do have an emergency where you need to buy something you can follow some extra steps to buy it but it causes you to be more intentional when you do.

Be intentional with your time

Think hard about why you keep spending. For me, I can say it was out of sheer boredom, lack of other things to do, for me shopping was a hobby.

If you’re similar the solution is to intentionally schedule your time to do things other than spending money and have a list of free activities ready to go when you feel tempted to spend your time shopping.

My favorite way to save money is to spend time making it. I recently shared some of my favorite side hustles that are recession, quarantine, and pandemic proof in case we happen upon another one of those. Seriously though there are so many flexible side gigs there’s no excuse not to be doing one if you’re trying to shop less.

Start saving

In order to stop getting into debt, you have to have an emergency fund to tap into when emergencies arise. So once your spending is lower than your income, put the extra into a high-yield savings account separate from your regular checking.

Your emergency fund should not be right next to your checking account, keep it separate. I’ll put a link to whatever my current favorite is in the description. 

After you save an emergency fund then start saving for things you need instead of putting them on a credit card. These are called sinking funds. I keep my sinking funds in the savings account that accompanies my checking but if you have a problem with spending everything in your account as it comes in, put it in with your emergency fund away from where you can easily spend it.

And that’s really all you need to do to stop spending money you don’t have. Sure I could probably find 5 more tips but if you can get through these, these are the cake, everything else is just icing.