How to Reel in Spending and Get Your Budget on Track

Overspending can be a rare, temporary activity that you recognize, correct, and move on from, or it can turn into a serious financial problem. Unfortunately, there's no alternative to recognizing overspending, understanding that it can't continue, and taking steps to put an end to it.

That's not easy when temptation to spend is everywhere, whether you're driving through town or surfing the web. Ultimately, the way to financial health is reigning in overspending and developing a workable budget that keeps spending from getting out of control again. Here are some ways to tackle that process.

Recognize When Overspending Is a Problem

Here are a few signs that you've gone beyond the occasional indulgence and have a real spending problem that could have serious long-term effects:

  • Your credit cards are maxed out
  • You hide spending from your partner
  • You have opened new credit cards to fuel your shopping habit
  • You don't have any hobbies other than shopping
  • You and your partner argue about money frequently
  • When you get cash, it tends to vanish and you don't know why
  • Your house (or closet) is full of things you don't use

Address Root Causes of Overspending

Many causes of overspending are interrelated. For example, you and your partner have different spending philosophies, and arguments bring on stress, which you fight by shopping. Perhaps you grew up poor and your upbringing taught you that when you have money, you spend it to address pent up demand. Or you never have much left over from your paychecks and figure you might as well spend it because it's only $20 (or $50, or $100) and why bother saving such a small amount? Or maybe you're just really bored and think shopping is your only available recreational activity. Once you identify why you overspend, you can take steps to remedy the situation.

Next step: Sign up for Mint and start gaining control of spending today.

Example: When Cash Burns a Hole in Your Pockets

You got money from the ATM yesterday afternoon, and now it's all gone. How can that be? Most of us have been there. What's usually happening is that some spending is so routine that you barely notice it happening, and it adds up fast. You used some of the money to pay the babysitter last night, and your husband needed train fare, and you were out of coffee so you bought some on the way to work. Boom: all your cash is gone.

The only way to fix this problem is to write down everything you buy once you get cash out, including tiny incidentals like vending machine snacks. Do this for a couple of weeks and you'll see that certain types of spending predominate. At this point you can make changes to curb your weaknesses.

Example: Impulse Purchases Add Up to Too Much

Everyone makes the occasional impulse purchase, but the key word is "occasional." If you use credit cards frequently and end up with a couple of impulse items every time you shop, you don't feel the effect of those purchases until your credit card bill arrives and you're bewildered as to why it's so high.

One way people address this problem is by determining a reasonable amount of spending for the week based on needs and income and giving themselves a cash "allowance." Once the weekly allowance is used up, there's no more spending until next week. Doing this for several weeks lets you identify your weaknesses and look for ways to cut back. When you spend cash, you feel the effect of a purchase immediately rather than postponing the impact until the credit card statement arrives.

Long Term, a Budget Is the Answer

Making a budget is how you ensure spending is in line with your income. Using an app like Mint makes it quick and simple. With Mint, you can gather your account information in one place, quickly set up a budget that's customized for your life, and track spending easily. You can even set up financial goals (like saving up for a new car) and track progress toward them.

Mint also offers a free mobile app, so you take your budget with you where you face your biggest challenge: in stores. Admitting you overspend, identifying where you overspend, and taking steps to curb overspending are the initial steps to bringing spending in line with your income. Creating a realistic, easy-to-use budget with the help of an app like Mint is how you avoid falling into the same overspending trap again.

Next step: Sign up for Mint and start gaining control of spending today.