How to stop overspending: 3 effective tips to reduce expenses

According to many personal finance surveys, over 60% of young people admit they often run out of money before their next payday. The common reason is not low income, but uncontrolled spending habits. Just a few impulsive purchases can make a salary or allowance "disappear" very quickly.

If you've ever wondered why your money is almost gone as soon as you receive it, you're likely having trouble with unplanned spending habits. The good news is that this can absolutely change if you understand the right ways not to overspend and apply some simple money management principles.

This article will help you understand how not to overspend, from identifying spending habits, controlling impulsive purchases to building an effective personal spending management system. When applied correctly, you will not only save money every month but also create a solid financial foundation for the future.

Tip 1: How to change spending habits to save money

Step 1: How to create a spending budget

Determine total monthly fixed costs

• The first step to applying how not to overspend is to know exactly how much money you need to spend each month.

• List all mandatory expenses to avoid overspending your income.

• When you see the entire cash flow, it will be easier to manage your personal spending and control your money better.

List housing and utility costs

• Clearly state rent or mortgage payments if applicable.

• Add utility costs such as electricity, water, internet, trash, and management fees.

• If you live with friends or family, calculate the actual cost you have to pay each month.

• This is usually the largest expense in your personal spending budget.

Calculate monthly transportation costs

• Determine how you commute to work or school every day.

• Record expenses such as:

  • gas

  • parking fees

  • bus or train tickets

  • vehicle maintenance costs

• If carpooling or using public transportation, estimate the average monthly cost to manage spending reasonably.

Budget for food and dining

• Calculate the average amount you spend on food each week and multiply by the number of weeks in a month.

• Including:

  • groceries

  • dining out

  • coffee or drinks

• This is an area prone to uncontrolled spending, so it needs to be clearly recorded in your spending management plan.

Prepare a budget for medical and insurance expenses

• If you have health insurance or health coverage, calculate the monthly premium.

• If you don't have any yet, research suitable plans to avoid unexpected large medical costs.

• Forecasting this expense helps make your personal financial management plan more secure.

Record other living expenses

• Don't overlook small but recurring monthly expenses, for example:

  • pet food

  • dating or entertainment costs

  • app subscriptions, online services

• These seemingly small expenses are often why many people overspend without realizing it.

Add debt payments to the budget

• If you have credit card debt, personal loans, or installment payments, clearly state the amount due each month.

• Place this amount in the mandatory expenses category in your budget.

• This helps you avoid falling into a cycle of debt due to overspending.

Step 2: Shop with clear goals

Set goals before shopping

• An important principle in how not to overspend is to always know exactly what you are going to buy.

• Before going to the store, define specific goals, for example:

  • buy new socks to replace torn ones

  • replace a broken phone

  • buy essential household items

• When you have clear goals, you will limit impulsive purchases and avoid items you don't really need.

Focus on one main need

• When shopping, prioritize one essential item instead of buying many things at once.

• This helps you:

  • control your budget better

  • avoid unplanned expenses

  • form effective personal spending management habits

• Focused shopping also helps you easily set spending limits for each shopping trip.

Make a list before grocery shopping

• For grocery shopping, make sure to:

  1. Review the meals you plan to cook for the week.

  2. Write down a list of ingredients needed.

  3. Only buy what's on the list.

• This method helps you avoid overbuying and effectively apply how not to overspend in daily expenditures.

Clearly understand the purpose of each item purchased

• When buying an ingredient or product, ask yourself:

  • What is this for?

  • When will I use it?

• If you don't have clear answers, it's very likely an unnecessary expense.

Try online grocery shopping to control money

• If you often overspend when at the supermarket, try online shopping.

• The benefits of this method include:

  • seeing the total amount to pay before checkout

  • easily editing or removing items from the cart

  • reducing impulsive purchase decisions

• This is a simple but effective tip for controlling spending and saving money every month.

Step 3: Avoid discount traps when shopping

Understand that promotions often encourage spending

• Many stores design discount, clearance, and flash sale programs to encourage customers to buy more.

• When prices are heavily discounted, many people tend to think they are saving money.

• In reality, if you buy something you don't need, it's still wasteful spending, even if the item is on sale.

Don't buy just because it's on sale

• A common mistake in personal spending management is buying items just because they seem "cheaper than usual".

• Even big discounts can lead you to spend more money than intended if you buy many unnecessary items.

• Therefore, don't let "sale," "flash sale," or "50% off" signs dictate your shopping decisions.

Ask 2 questions before buying

• To effectively avoid overspending, ask yourself two simple questions:

  1. Do I really need this item?

  2. Is this item within my established spending budget?

• If the answer to either question is "no," it's best not to buy it.

Prioritize needs over wants

• By controlling your spending habits, you will:

  • save money for what you truly need

  • avoid impulse purchases due to promotions

  • keep money for more important goals like saving or investing

• This is an important principle in how to avoid overspending and effectively manage personal finances.

Step 4: Limit credit card use

Carry only cash according to budget

• An effective way to avoid overspending is to limit carrying cards when shopping.

• Before going out, determine your weekly spending budget and only carry the necessary amount of cash.

• Once you run out of cash, you will be forced to stop shopping, thereby avoiding impulsive spending.

Cash helps control spending better

• When paying with cash, you can clearly feel the amount of money you are spending.

• This helps:

  • reduce unnecessary shopping habits

  • increase awareness of personal spending management

  • avoid exceeding your monthly spending plan.

If using a credit card, treat it like a debit card

• If you need to carry a credit card, set a rule for yourself:

  • only spend what you can pay back immediately within the month

  • do not exceed your established budget

• This mindset helps you view each card payment as real money leaving your wallet.

Avoid the habit of swiping your card for every purchase

• Credit cards often make spending "easier" because you don't see the money leaving your hands immediately.

• If not controlled, this can easily lead to:

  • overspending

  • credit card debt

  • loss of personal financial control.

Limiting reliance on cards and prioritizing spending within your financial means is a crucial step to effectively avoid overspending and save money each month.

Step 5: Eat at home to save money

Limit frequent eating out

• Eating out may seem like a small expense, but it's a common reason why many people overspend.

• For example: if each meal out costs around 200,000–350,000 VND and you eat out 3–4 times a week, the total monthly cost can reach several million VND.

• To manage personal finances effectively, you should:

  • limit eating out to about once a week

  • then gradually reduce it to 1–2 times a month

• When you cook at home regularly, you'll find yourself saving significant money each month.

Prioritize cooking at home

• Buying food and cooking yourself helps to:

  • control costs better

  • actively manage meal portions

  • reduce unnecessary expenses.

• Additionally, when you eat out less, restaurant meals on special occasions become more meaningful.

Prepare lunch to bring along

• A simple habit in how to avoid overspending is to bring lunch when going to work or school.

• You just need to:

  1. spend about 10 minutes in the evening or morning

  2. prepare sandwiches, packed lunches, or snacks

• This small habit can help you save a significant amount of money each week.

Eat out reasonably

• There's no need to completely cut out eating out, but you should choose wisely to control your spending:

  • look for combo deals or discounted lunch sets

  • use discount vouchers or promotions

  • buy food at supermarkets or convenience stores instead of expensive restaurants

• These choices allow you to still enjoy eating out without breaking your monthly spending plan.

Step 6: 30-day no-spend challenge

Practice a "spending fast" to control money

• An effective way to change overspending habits is to try a 30-day no-spend challenge.

• During this period, you only buy things that are truly essential for daily life.

• The goal is to see how much you can reduce spending to the lowest possible level while maintaining normal living.

Only spend money on essential needs

• For 30 days, limit spending to mandatory expenses such as:

  • rent or housing

  • food and necessities

  • transportation costs

  • utility bills

• This helps you clearly recognize the difference between true needs and shopping wants.

Distinguish between "needs" and "wants"

• After a period of application, you will better understand how to manage your personal finances.

• For example:

  • food and housing are mandatory expenses

  • but some expenses like impulse shopping or unnecessary items can be cut

• Identifying these expenses correctly is a crucial step in how to avoid overspending.

Allow for expenses that provide real value

• Not every expense beyond food and housing is wasteful.

• Some expenses can be considered reasonable if they provide long-term benefits, for example:

  • gym fees to maintain health

  • therapy or massage if you have health issues

• As long as these expenses are within your spending budget, you can still spend reasonably.

Re-evaluate spending habits after 30 days

• After the challenge, review:

  • how many expenses you've cut

  • which expenses are truly essential

  • which expenses were previously just habitual spending

• From there, you can build a more sustainable money-saving plan and personal financial management.

Step 7: DIY to save money

Apply DIY to reduce spending

• DIY (Do It Yourself) is an effective way to avoid wasteful spending.

• Instead of buying expensive items, you can make them yourself at home for a lower cost.

• This method not only helps save money but also helps you learn many useful skills.

Create your own decorations and items

• Many decorative items or household items can be made yourself at a very low cost.

• For example:

  • making wall art

  • recycling bottles into decorations

  • making storage boxes or small shelves

• These DIY products help you both save costs and create items with a personal touch.

Utilize DIY idea sources

• Currently, there are many websites and communities sharing cost-saving DIY ideas.

• You can find:

  • guides for making decorations

  • ways to recycle old items

  • tips for making household items

• These resources help you turn existing items into new products instead of buying unnecessary new ones.

Do household chores yourself

• A simple way to reduce monthly expenses is to do things you can do yourself.

• For example:

  • cleaning the yard

  • mowing the lawn

  • cleaning the pool or house

• When the whole family participates, you save money and establish a habit of reasonable spending management.

Make your own cleaning and personal care products

• Many household products can be made from basic ingredients bought at the supermarket.

• For example:

  • homemade laundry detergent

  • multipurpose cleaning solution

  • handmade soap

• These products are often much cheaper than ready-made items and help you be more proactive in managing family expenses.

Step 8: Save for big goals

Define clear financial goals

• An effective way to maintain a non-wasteful spending approach is to set a specific financial goal.

• Goals could be:

  • buying a house

  • long-term travel

  • building an emergency fund

  • investing for the future

• With clear goals, you will be more motivated to control your spending.

Allocate savings each month

• Set a rule to transfer a fixed amount into a savings account as soon as you receive income.

• Simple ways to apply:

  1. determine the amount you can save each month

  2. transfer money to a savings account as soon as you get paid

  3. view this amount as a mandatory expense

• This habit helps you build a stable personal financial plan.

Turn savings into motivation

• When you cut down on expenses such as:

  • buying unnecessary clothes

  • eating out or entertainment too frequently

• The money saved will gradually accumulate for long-term goals.

• Seeing the amount increase each month will help you stick to prudent spending habits.

Always remember why you are saving

• Whenever you want to buy an unnecessary item, ask yourself:

  • is this item more important than my financial goals?

• Continuously reminding yourself of your goals will help you maintain financial discipline and establish sustainable saving habits.

Tip 2: Effectively evaluate personal spending habits

Step 1: Check for unnecessary expenses

Identify non-essential expenses

• When you feel you are spending beyond your financial means, the first step is to review expenses that are not truly necessary.

• These expenses are often called discretionary spending, different from fixed costs such as:

  • rent

  • utility bills

  • basic living expenses

• Because they are not mandatory, these are the easiest expenses to cut in the approach to avoid wasteful spending.

Self-assess your spending habits

• Ask yourself a few important questions:

  • Am I spending too much money on entertainment or shopping?

  • Are these expenses making it difficult for me to pay my monthly bills?

  • For example: will a trip or an expensive item deplete your budget?

• This self-assessment helps you clearly see what needs to be adjusted in your personal spending management.

Check services you're paying for but not using

• Many people are paying monthly for services they hardly use.

• Review expenses such as:

  • app subscriptions or entertainment platforms

  • gym memberships rarely used

  • cable TV even though you mainly watch online content

• Canceling these services can help you significantly reduce your monthly expenses.

Consider expenses in the "grey area"

• Some expenses are not entirely wasteful but should still be carefully considered, for example:

  • gym fees to maintain health

  • nice clothes for professional work

• These expenses don't necessarily need to be cut, but you should evaluate if they fit within your spending budget.

Prioritize spending within your financial means

• When you effectively control non-essential expenses, you will:

  • reduce financial pressure

  • find it easier to save money

  • build a habit of reasonable and sustainable spending.

This is an important step for effectively implementing methods to avoid overspending and manage personal finances long-term.

Step 2: Review 3 months of spending

Review your entire spending history

• An important step in avoiding overspending is to review how you've used your money recently.

• Review your spending data for the past 3 months to understand where your money is going.

• Sources to check include:

  • credit card statements

  • bank transaction history

  • cash spent.

Record even small expenses

• Don't overlook small expenses, as they often accumulate into large sums.

• For example:

  • daily coffee

  • fast food on the go

  • stamps or miscellaneous expenses

• When added up, you might be surprised by the total amount spent each week or month.

Analyze spending data over a longer period

• If possible, review an entire year's worth of spending.

• Many financial experts often analyze a full year of spending data before creating a personal financial management plan.

• This helps you clearly see:

  • spending trends

  • peak spending times

  • recurring expenses.

Distinguish between needs and wants

• When reviewing data, separate into two groups:

  • essential needs: food, rent, living expenses

  • discretionary spending: drinks, entertainment, unnecessary shopping

• A simple example: money spent on drinks at a bar versus money spent on groceries for the week.

Determine the ratio of fixed costs to flexible costs

• Calculate:

  • what percentage of income is allocated to fixed costs

  • what percentage is allocated to discretionary spending.

• Fixed costs typically include:

  • rent

  • utility bills

  • mandatory payments

• Discretionary spending can be adjusted, so this is where you can cut back to avoid overspending.

Step 3: Keep receipts to track spending

Save receipts after every purchase

• A simple way to adopt a method to avoid overspending is to keep all receipts after shopping.

• Instead of throwing them away, keep them to know exactly how much you've spent on:

  • food

  • eating out

  • daily shopping

• This habit helps you track your personal spending more accurately.

Record daily expenses

• From receipts, you can:

  • record expenses in a notebook

  • enter data into a spending tracker spreadsheet

  • use a financial management app

• Recording every expense helps you realize small but recurring expenses.

Identify when spending exceeds budget

• When total spending exceeds your monthly budget, receipts will help you determine:

  • when you spent too much

  • which product category you spent the most on

• This allows you to adjust your personal spending management habits more effectively.

Prioritize card payments for easier tracking

• If you want clearer spending control, you can:

  • use a debit or credit card

  • check transaction history in your banking app

• This method helps you track your cash flow accurately without needing to carry too much cash.

Pay credit card balances on time

• If using a credit card, try to pay the full balance each month.

• This helps you:

  • avoid high interest rates

  • maintain financial discipline

  • better control your monthly spending plan.

Regular spending tracking will help you understand your money habits and effectively apply methods to avoid overspending in daily life.

Step 4: Use budgeting tools

Use budget management tools

• An effective way to implement methods to avoid overspending is to use budgeting tools.

• These tools help you:

  • calculate total annual income

  • estimate total living expenses

  • determine how much you can reasonably spend in a year.

• When you see the full financial picture, you'll find it easier to manage your personal spending.

Check if you are spending more than you earn

• Ask yourself an important question: am I spending more than I earn?

• Some signs that you are overspending:

  • having to withdraw from savings to pay rent

  • using credit cards for frequent purchases

  • no emergency funds left at the end of the month

• If this situation persists, you could fall into a cycle of increasing debt and decreasing savings.

Create a realistic monthly spending plan

• To manage personal finances effectively, ensure that:

  • total spending does not exceed income

  • each month includes an amount for savings

• When budgeting, clearly allocate for:

  • living expenses

  • personal spending

  • savings.

Use spending tracker apps

• Spending management apps help you control your money more easily.

• Simple application method:

  1. download a budget management app to your phone

  2. enter income and fixed expenses

  3. record every purchase immediately after payment

• This way, you always know how much you've spent and how much you have left in your monthly budget.

Tip 3: Seek financial support when spending is hard to control

Step 1: Understand impulsive shopping habits

Recognizing signs of uncontrolled spending

• An important step in avoiding wasteful spending is understanding impulsive shopping behavior.

• People with this habit often:

  • have difficulty controlling their spending

  • shop based on emotion rather than need

  • continue to buy even after exceeding their budget.

• Notably, after shopping, they often feel regret or financial stress, instead of joy.

Shopping to relieve emotions

• Many people use shopping as a way to cope with negative emotions.

• For example:

  • work stress

  • feelings of loneliness

  • boredom or anxiety

• However, this approach only provides temporary relief and can easily lead to overspending.

Common signs of emotional spending habits

• Some common signs include:

  • going out to buy one item but coming home with many bags

  • buying clothes or items but not using them

  • keeping tags on because they've never been worn or used

• These signs indicate that you may have a problem with uncontrolled spending habits.

Shopping as a temporary stress reliever

• For some, shopping increases significantly at particular times, such as:

  • holiday seasons

  • stressful times in life

  • when feeling sad or angry

• This makes them easily fall into a cycle of shopping to relieve emotions, leading to wasteful spending.

Awareness is the first step to change

• Once you understand why you shop excessively, you'll find it easier to adjust your behavior.

• From there, you can:

  • control emotions while shopping

  • build a habit of sound personal financial management

  • avoid falling into spending beyond your income.

Step 2: Signs of shopping addiction

Regularly spending beyond financial means

• A common sign of impulsive shopping is constantly spending more than you can afford.

• Ask yourself:

  • Do you often go shopping every week?

  • Do you often buy things even though you know you can't afford them?

• If the answer is "yes," it's very likely you have a problem with uncontrolled spending habits.

Feeling excited when buying unnecessary items

• Many people feel a special thrill when shopping.

• For example:

  • feeling happy or "euphoric" when buying many items at once

  • buying things even if they aren't truly needed

• This feeling usually lasts only for a short time and can then easily lead to regret or financial pressure.

Increasing credit card debt

• Another clear sign is growing credit card debt.

• You should pay attention if:

  • you have many credit cards at once

  • your outstanding balance increases each month

  • you have to pay off debt by borrowing more or using another card

• This is a warning sign that your spending is exceeding your income.

Hiding purchases

• Some people tend to hide their purchases from family or loved ones.

• Common behaviors include:

  • not talking about items purchased

  • hiding receipts or packages

  • finding other explanations for money spent

• This is a sign that shopping has gone beyond normal financial control.

Seeking additional income to continue spending

• Some people even seek additional work not to save, but to continue shopping.

• This indicates that spending habits have become difficult to control.

Difficulty admitting spending problems

• Those who tend to be shopping addicts often don't easily accept that they have a problem.

• Denial leads them to:

  • continue to overspend

  • not seek ways to change financial habits

• Recognizing the problem early is an important step to start controlling spending and avoiding wasteful spending.

Step 3: Seek psychological support when needed

Understanding that uncontrolled shopping can be a form of addiction

• In some cases, impulsive shopping is not just a bad habit but can also be related to psychological issues.

• When shopping becomes a way to relieve emotions like sadness, stress, or loneliness, it can easily lead to spending beyond one's financial means.

• Recognizing this is an important step to change unhealthy spending habits.

Consult a psychologist

• If you find it difficult to control your spending, talking to a psychologist or therapist can be very helpful.

• They can help you:

  • understand the underlying causes of impulsive shopping

  • recognize the risks of wasteful spending

  • develop methods for sound emotional and spending management.

Join a support group

• In addition to individual therapy, you can also join support groups for people with spending problems.

• The benefits of these groups include:

  • sharing experiences with people in similar situations

  • learning spending control methods

  • maintaining motivation to change financial habits.

Find healthy ways to relieve emotions

• During therapy, you can learn other ways to deal with emotions besides shopping, for example:

  • exercising

  • talking to friends or family

  • engaging in relaxing or creative activities

• These methods help you reduce your reliance on shopping and build a healthier financial lifestyle.

References

1. Larsen, T. (CFP®). Certified Financial Planner. Expert Interview.
2. Packard, B. Financial Advisor. Expert Interview.
3. WikiHow. Budget Your Money. https://www.wikihow.com/Budget-Your-Money
4. MoneySavingExpert. Stop Spending and Budgeting Tool. https://www.moneysavingexpert.com/family/stop-spending-budgeting-tool/
5. MoneySavingExpert. Budget Planning Guide. https://www.moneysavingexpert.com/banking/budget-planning/
6. Bankrate. Spending Too Much? Try the 7-Day Challenge. https://www.bankrate.com/finance/personal-finance/spending-too-much-try-the-7-day-challenge-2.aspx
7. Huffington Post. Saving Money Tips. https://www.huffingtonpost.ca/2014/01/22/saving-money-tips_n_4646686.html
8. My Simpler Life. Spending Fast. https://www.mysimplerlife.com/spending-fast
9. I Spy DIY. DIY Projects Blog. https://ispydiy.com/blog/
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Information consulted and verified by expert: Andrew Lokenauth.

Content editor: Rene Lee Nguyen.