How to Stop Overspending Immediately with One Easy Trick
I love to shop. It might not be for clothes, expensive purses, or jewelry, but I love to buy home decor. And daydream about herringbone backsplashes and kitchen remodels. Oh, and don’t forget about the hours I could spend in any craft or home improvement store within a 50 mile radius!
The cold, hard truth is that shopping is a necessity, just like eating and drinking (lots of) coffee. Even if you try not to shop for non-necessities, you still need groceries, toiletries, and other household items.
Consumers are exposed to up to 10,000 brand messages A DAY according to the American Marketing Association*. Emails, billboards, and tv ads – oh my! There’s no avoiding marketing ploys even if you think you are. We’re subjected to them everywhere – even while buying groceries or picking up toiletries at CVS.
So are we all doomed to overspend at the sight of a online sale, girls’ day out, or those thousands of ads we’re subjected to daily? Thankfully, the answer is no. I have one great trick to help you stop spending money and cut down on buying things that you don’t really need.
How to Stop Overspending
As I’ve gotten older, I’ve learned little tricks here and there to help me curb my spending. Whether it’s to put one thing back before checking out, wrapping a note around my credit card as a reminder, or switching to an all cash system, I’ve tried just about everything.
But the one trick that worked the best and that was immediately very effective may sound a little too crazy easy. Trust me though – it works!
Are you ready? Are you on pins and needles? Alright, here you go:
I figured out what my hourly pay rate was.
By figuring out what my hourly rate is, I had a comparison point to work off of. For example, let’s say you make $20 an hour. A dinner out with your spouse, complete with drinks, apps and dessert, could easily be $80, right? Are you willing to work 4 hours for that one hour dinner? If so, great! Enjoy! If not, you’ll find yourself adjusting your definition of what’s worth one hour of work. Pretty tricky, right?
Why Does this Trick work to Slow Down Spending?
This trick worked the best for me because it gave me a real-life, solid perspective point to work from. Previously, I would weigh buying a fancy candle holder today against my retirement. Eh, not really effective. It’s too blurry of a comparison and waaaay too easy to talk myself into, especially when retirement always felt so far away (which it’s not!).
But compare that same fancy candle holder against 4 solid hours of work? Whoa. Let’s face it – the hours most people spend at work are…less than the best time of their life, right? When you compare buying a candle holder against 4 more hours of extra meetings and crazy coworkers, it’s a no-brainer, right?
How to Calculate Your Hourly Rate
Say you make $60,000 a year, and work about a 40 hour work week.
40 hours a week x 52 weeks a year = 2080 hours worked a year
Take your salary and divide it by 2080 hours.
$60,000 / 2080 = $28.85 an hour
How to Use this Simple Trick to Curb Overspending
Now you have your approximate hourly rate. Next time you want to buy something, think about how many hours of work that equals out to.
A $60 dinner? That’s a little over 2 hours of work.
A new $400 purse? That’s almost 14 hours of work, or, 1.75 days!
Really puts things into perspective, right? While this isn’t anything groundbreaking by any means, when you figure out what you actually make an hour, it really makes you stop and rethink your purchases. You might actually be shocked at how little your hourly rate works out to be. And we’re not even talking about after taxes, healthcare, or anything else!
When I did this, I took the lower of our salaries between my husband and I to figure out an hourly rate for us. Using that lower number really drove it home and made both of us realize just how much one of us had to work in order to afford that dinner, movie tickets, or gym membership.
Next time you’re on a night out, or just doing some mindless shopping for fun, stop and remember your hourly rate. Write it on a post-it and wrap it around your credit card. Make it a habit to stop and think about what you’re doing. The only way to change a habit is through consistent actions. Try stopping that behavior with a visual cue, like your hourly rate on a post-it. You’ll be surprised at how well it works!
Let me know if you try this and what the results were! Leave a comment below!
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A forty-ish web designer/developer by day, a budget & financial fanatic by night. I’m a mom, wife, avid reader, and DIY enthusiast who’s tracking our journey to debt freedom. Read More