How to Find Your Money Leaks and Stop Overspending

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There’s nothing like a new year to get the ball rolling on changing some of your habits. A fresh year is a fresh start that can give you the motivation to sort things out. And you know that we’re here to help you get your finances looking the best they ever have.

One of the most effective ways to create financial change in your life is to find and fix your spending leaks. Money has a funny way of slipping through our fingers when we don’t pay attention to it.

Plugging leaks in your budget accomplishes two things: It gives you a concrete understanding of your relationship to money, and it saves you money in the long run.

Your Relationship With Money

The super-sneaky thing about money is that no two people have the exact same relationship with it. You are in a completely unique relationship with money.

How is that relationship determined? By lots of things, including your financial education growing up, how your parents spend money, how much money you earn, your access to credit and desire to use it, and how spending money makes you feel.

The good news is that whatever your relationship to money is, it can always change. You are in control and you can make changes in your financial life. Whether it’s earning more, spending less, learning about money or trying a new financial tool, you have the capacity and opportunity each day for change.

Find Your Spending Leaks

So you’re ready to figure out your spending leaks. Here’s your three-step approach.

1. Track your spending for a month.

Tracking your money is the single best way to understand your spending habits. And even if you’re not historically a budget person, you can still track your spending pretty easily.

Personal Capital is a great financial app that lets you create and monitor a budget free. We recommend trying it for at least a month — long enough to track those expenses!

Another awesome tool is YNAB. This app has excellent budgeting features and tools. However, you will have to pay a small fee of $6.99 per month to use the app.

2. Organize the numbers.

With all this information at hand you should have a pretty good idea of what a month of spending looks like for you. Go through all the numbers and highlight the things that are necessities.

This is the stuff you have to spend on to live. Rent, health insurance, utilities and transportation to work fall into this category.

Next, highlight in a different color all the things that are wants in your life. Things like Lyft rides, restaurant meals, movie tickets and online shopping all fall under this category.

3. Dig into the details.

Now that you have a clear idea of where your money is ending up each month, a pattern will probably emerge. Maybe you go to happy hour with friends every Thursday. After a few drinks you don’t want to drive home, so you take a Lyft. Or maybe you work the late shift, so you always pick up food on the way home.

Map out the patterns that you see with as much detail as you can. Digging into the details of your spending will give you the clearest picture of your relationship to money. The key to changing your habits is understanding them. Once you understand the why behind your spending, you can introduce a new why to change them.

Fix Your Spending Leaks

Now comes the fun part. You want to make change in your life right? So let’s do it!

With your newfound knowledge of where your money goes, you have put yourself in the driver’s seat. You’re not at the mercy of your money; your money is at your mercy.

Remember, in order to make change in your life you have to be willing to face your excuses as well as your habits. Knowing what your habits are will take you only so far if you excuse yourself from following through on changing them. Fixing your spending leaks requires a certain amount of dedication and discipline.

You can do it! Here’s how to instill discipline in yourself and fix those leaks:

1. Preparation is key.

When you work out, you get dressed in workout gear right? You head outside for a run or to the gym to hit the weights. You take the time to prepare yourself and take yourself to a place designed for working out.

The same thing can be applied to your spending habits. Let’s go back to the example of picking up food on the way home from your late work shift. If you know on Tuesday that you’ll be working late on Thursday, you can prepare food at home to preempt your late night spending. Bring in a meal and stick it in the work fridge. Don’t have a work fridge? Bring something like a meal bar that doesn’t need to be refrigerated while you work and that will hold you over until you can get home. Stick granola bars in your glove box if you have a car or your bag if you take the bus. Having food available will curtail your hunger and your spending.

Prep for as many things as you can. Meal prep is a great money saver no matter your work schedule. So is something like carpooling with friends to the bar and picking a designated driver so you don’t need to rely on an expensive cab to get home. A little forethought in your plans for the week can save you tons of money.

2. Avoid or change your spending triggers.

Spending triggers come in many sizes. And we all have them! A spending trigger is a situation, person or habit that causes you to spend money. Avoiding them is a surefire way to avoid spending.

I have a friend whom I adore. She also happens to make about $60,000 more a year than me. So when she suggests going out to dinner, it’s always to a restaurant that I classify as “expensive.” I don’t want to seem cheap, so I used to always accept her suggestions. She was a spending trigger to me.

What’s a girl to do? Abandon the friendship entirely? Heck no. You don’t need to give up people in your life to save money — that’s crazy talk. I told my friend that there was a huge income discrepancy between us and that I’d love to hang out with her in ways that are more in line with my ability to spend. She was totally down; she didn’t know she made so much more than me or that each time we went out it took a big chunk from my budget.

Communication is helpful if your spending trigger is a person. If your spending trigger is that weekly email from your favorite store, unsubscribe. If you take the route to work that goes past your favorite restaurant, change the route. Take the trigger out of your face and you’ll spend less money.

Finding and fixing your spending leaks takes some upfront work, but changing your habits can be fairly easy. You can train yourself to have new habits. And after a while, your new habits become your old habits. You’ll have more money in your bank account too!

What are your spending triggers, and how to avoid them?

Kara Perez

Kara Perez is a freelance personal finance writer. She is the founder of, a company that connects women and money. Kara lives in Austin, TX and believes in the power of budgeting and peanut butter.

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