The Only Thing That Stopped Me From Overspending

Hey there, real quick, before we jump into the episode, listen, if your earnings treadmill hasn't set you free yet, running faster won't either. Listen, hustle without principles just going to burn you out. So here's what I want for you. I want you to join me for my money machine experience. Live it is three free trainings. Deep dive into how to escape the treadmill and build a money machine that actually works for you. All right, grab your spot here by going to moneymachinelive.com and I'll see you in the free training. Have you ever looked at your bank account and thought, where did all the money go? Or maybe you just felt that sinking feeling after an impulse buy that you really didn't need. Listen, if you've ever struggled with overspending, whether it's emotional spending or comparison spending, or just swiping the card without really thinking about it, this episode's for you. Because it was for me, too. So here's what I mean. Because the truth is that it's not just about the money. It's about what the money could have done for you and your future. And today, I'm going to show you the one thing that finally stopped me from overspending. And how you can do the same without feeling restricted, without feeling tied down.

All right, confession time. Here's the deal. I remember driving home on New Year's Eve of all days. I was leaving, I was working downtown Los Angeles. I was driving home, it was. It was an evening and I, for some reason had this urge to look at cars. So I literally pulled into a car dealership that evening and I drove out with a new car. I spent, oh, tens of thousands of dollars that I really didn't need to spend, that I probably shouldn't have spent. I went into debt, I did some things, and, you know, a day or two later, I'm going, what the heck did I do? Now that's a big spend. But the question is, how many little spends do we do the same thing? This mindless kind of thing? And it wasn't that I was reckless with my money, but I was spending without direction. And I had no idea the full fledged impact of that, what was slipping through my fingers until I realized that I wasn't using my money to build the life I wanted and that I was being driven by emotional desires and those kinds of things without a plan. So it was a huge realization. And I'm going to break some things down for you around the truth behind overspending, why we overspend, and Like I said, I'm human. I do the same thing sometimes. My 4P framework that stops overspending without feeling restricted. And how do you make sure that you have joy in the journey without guilt or regret when you do spend? Okay, so here's the thing. Let's just talk about for a moment the real cost of overspending. Because, yes, you write a check, you swipe a credit card, you pay a bill for something that maybe you didn't need, you didn't want, but you saw it come up on, on Instagram, on social media, you saw it on, on the, the tv, you heard about it and you went and did it. Overspending isn't about losing money. It's about losing the future if we're not careful. Now, I'm not saying not to spend. Let me be really, really clear. I'm not telling you not to spend. I'm just telling you to spend. One, with a plan, two, with an understanding and an awareness of what you're doing. So it affects your stress levels when we spend mindlessly because it affects our relationships, it affects our opportunities, and it affects our financial freedom. Yeah. When we look at the percentage of people that are living check to check. 60% of people they say to live in, check to check. Regardless of income level and, you know, higher incomes, it's, it's a lower percentage, but they're still living check to check. That's a challenge. I just heard a recent statistic that, that the average credit card balance that people are carrying is up to almost $10,000. And that becomes harder and harder to get out from under when you're paying 25, 28% interest. And, and there's this, this loss of opportunity because every dollar you spend today isn't a dollar that's going to work for you for your bigger, brighter tomorrow. Think about this. Every dollar you put away in Your, in your 20s goes up 88 times by the time you're 65, by the time you're 20. When you're 25, it goes up 43 times. At 30, it's 23 times. The bottom line is that every dollar that you can put towards your future is a multiple in the future. Now remember, the idea is to spend on the things that matter to make that happen. So let's just look at what the consequences are of this just before. And then we'll talk about how do you navigate this? Because this is the thing that changed me is when I started to understand the cost of some of the spending, I was very then intentional and Deliberate, because if I spend emotional spending or, or mindless spending of $100 a month on unnecessary things that actually have momentary pleasures and then they go away and I didn't really need it. After 30 years, at 7%, that's $122,000. Okay, now that may not seem a lot, but think about $122,000 an additional assets when you get older, okay? What if it was $500 a month because you're putting on credit cards and not talking about the interest you're paying, but just the lost earnings, the lost wealth. But at $500, at 7% over 30 years, you're looking at $610,000. It's a lot. Now let's double it at $1,000 a month, at 7% over 30 years, it's over $1.2 million. Here's the thing is that when we start to add up some of these spending that maybe we don't need to make, it can have a dramatic impact on our future. Now remember, I am not the person that believes that you can live a rich life through deprivation, but I do believe that it requires discipline to live a rich life. And part of that discipline is really understanding what's meaningful to you. So you're living your life. The tendency with all the marketing and this social media and the comparison is we start to live someone else's definition of life. And so, so let's talk about, about that, because in the, in the end, what we're dealing with is this financial toll, but then comes with it the emotional mental toll of overspending. Because there's this cycle of spend, regret, spend, spend, regret, spend. There's this dopamine hit when we spend. I, I am a stress spender. And I know that. I know what my trigger points are because I've done the work to figure out, hey, what's what. Why do I spend sometimes? Why do I go shopping sometimes? And with it being online, it's easier. And so I will be. I'm a, I'm a stress spender. Well, if there's some things stressing me and I'm trying to get, I'll go out and I'll do some shopping. Okay. Did I need it? No. But what did I need? The dopamine hit. Okay, spending. The dopamine hit from spending is a temporary hit, but the stress from the bad decision, the regret lingers on for a while. And then you have this anxiety of going, now I don't. Because I still, even though I do that, I keep it within my Means. But there's this anxiety and shame that I put it on a credit card. How am I going to pay it when the bill comes in? Okay? And the guilt over maybe wasting money, and you look back and you realize, maybe I could have done something more meaningful. Remember, meaningful is in your eyes, not in anyone else's eyes. I'm not here to tell you what's meaningful, what's not. Okay? But I want you to start to look at it through the eyes of what is the cost down the road versus the momentary pleasure that comes into play and doing it from that perspective, because the things we buy to impress others don't actually improve our lives. That brings us down, that keeps us financially stuck. And so I've gotten past that. There was a stage in my life where the things that I bought were to impress the others for what it would look like from the outset. I don't. I don't care anymore. I want to live my life. I want to be an example of living true to what, what I've been called to do. And I want you to do the same. All right, so why is it that we overspend? And this is where I started to understand some of the things that came out. First thing is, like I said, emotional spending. We buy a momentary happiness, and unfortunately, it doesn't last. And this idea of retail therapy is real. Okay? There's spending as a reaction to stress, as I just said, there's a spending as a reaction to sadness. There's spending as a reaction to boredom. There's spending as a reaction to celebrate. And so the thing is that that creates this dopamine deception, if you will, where the brain rewards the impulse purchase. But then all of a sudden it fades really quickly. So buying a new gadget, buying a new outfit, buying a new car feels amazing until the bill comes in or the novelty wears off. And then you realize, I got this momentary pleasure, but I have this long term pain of the payment plan to make it happen. So one of the things that we need to look at is recognize if you are an emotional spender. One of the reasons I say at the beginning to track, track all your spending. But more importantly, when you track the spending, to track the emotions around the spending, you start to see what your spending triggers are. And, and you might be an emotional spender. I mean, there's nothing wrong with it, you just need to understand it. And now you have the ability to control it. So that's one reason. The other reason is what I call comparison spending. This is the social media Trap you. If we can look anywhere we want in social media and we will see the illusion of wealth, the illusion of perfection, the illusion. Because people are parading their best moments of life and not their financial reality. You could see it all over just. I was just listening to a podcast about the Chrisley's. I didn't watch the show. It was a reality show. And they all paraded as if they were wealthy, wealthy beyond imagination, yet they were one. Deceitful fraud and. And did illegal things. $50 million in debt and $55 in a bank account. Okay, you can parade what you want, but the question is, is, am I allowing someone else, what they're creating as their parade, their facade, to impact my purchasing decisions? And it is a very difficult thing to navigate because we see it. I remember Patrick Bed David, who. We grew up in the same neighborhood, and he said, you know, back in the day, and we're about the same age back in the day, our comparison set was the kid down the street that just got the new Stingray bicycle. Okay? And I remember Stingray bikes and Schwinn Stingray bikes. And he says, but the comparison set for people today is the Kardashians Jet. It's unrealistic. Now, I'm not saying not to have lofty dreams. I want you to have lofty dreams. But to believe that's the norm and that you are entitled to it, to make that decision. To make, in effect, bad spending decisions just because you want to look like someone else. It's. It's this centuries, this generation's version of Keeping up with the Joneses and the Joneses are broke. And there's this psychological impact of doing that. And what we need to start to look at is the reality.

People that flaunt their luxuries or their luxury lives may be drowning in debt. You don't have a full picture of it. And the reality is, do you really want their life? What do you want independent of what you see? If you from zero base, you say, I'm going to. I'm going to design my life without limitations. What do I want it to look like? Is it a tent in Montana? Is it a yacht in Monaco? Whatever it is, make it yours. Not something you see on social media. And if you feel pulled by this, if you feel tugged by this, if you feel like you're triggered by comparison, then as hard as this, unfollow the accounts, create an environment in your world that's supportive. I have unfortunately had to do that with accounts where it was just nothing but Negativity, I don't want to put that in my life. I don't want to occupy my time. And there's accounts that I happen to know the reality of how they're living, yet they're parading something different. And to me, there lacks integrity, lacks ethics. I unfollowed them. And then ask yourself, do I actually want this.

Or do I just want to be seen with it? Right. So comparison spending, the third reason that I think it happens. And then I'm going to break down the 4P framework that allowed me to stop. This is, that is the third thing is lifestyle creep. More money doesn't solve overspending. We think, oh, if I just made more. No, no, no. Because if there is a habit overspending, if we have emotional triggers, comparison triggers, or stress triggers, things like that, and we have more money, it doesn't change the trigger, okay? And so often when we get a pay raise or we make more money, we think that will fix the problem. But it isn't that because it isn't a one time problem. It is a habit that we've created and we need to shift the habit. And I'm not saying not to upgrade your life. What I am saying is to do it responsibly and look at it and say, if I come into more money, be really clear of how you're using that money up front. How much of it is going towards giving more quality to your life and upgrading it? How much is going towards your future? How much is going to paying off the past if you have those debts, but not allowing your lifestyle creep to get out of hand? Just because the neighbor got a new a new car doesn't mean you need to. Just because you got a raise doesn't mean you need to go completely crazy and buy a whole new wardrobe. But does it mean you don't celebrate? No, absolutely. You always got to celebrate, but you do it responsibly. All right, so how did I navigate this? There's the 4P framework that I did. This is what stopped me from overspending. And that kind of, kind of keeps me in check. It's a game changer. And how I created a system.

That allowed me to also enjoy life along the way, that I didn't feel like I was on some fasting diet, depriving myself of all the joys and all the things. And so number one, the first P is this purpose. Money should be tied to your ideal life. I say that the decisions you make with your money today should be in service of the future you want tomorrow because your situation with your money today is a result of the behaviors, the choices and decisions of the past. And if you want a different financial future, we need to make different decisions, behaviors, and habits today. And we'll get that. Now, it doesn't mean that it's easy. I make. I know it sounds easy, but it doesn't mean that it's easy. But money isn't just for transactions. It is to build. It is the paint, I call it the paintbrush, to paint the masterpiece called your life. It's the tool to build the life that you want. And so, yes, a portion of it's going to be used for transactions, but I want to tie it and align it with my purpose, with my drive, with my vision for life. Every dollar has a meaning. Every dollar has a job description. And the questions you want to ask here is, does this purchase move me toward the life I want.

Or further away? And then ask me and then ask the second question is, am I spending for the moment or for long term joy? So then you're not as much spending on mindlessly on gadgets and things. I was just looking at a new camera and I gotta go, I don't need a new camera. Why am I doing it? Okay, So I didn't do it, okay, start and I can afford it. That's not the issue. The issues, the habits that I'm creating, okay? And I started to use money more towards experiences and freedom and the investments in my future to do the things with my wife, with my son, with my grandkids, and with people that I care about to be able to put my heart and soul into serving and all those things. Because that's the purpose. That's the future. And I ask myself, does this support that? So the first P is purpose, the second P is plan, okay? A dynamic, personalized financial plan. Now, some people will sit back and say, oh, you mean a budget Now? No, no, no, no. See, because a budget everyone looks at as restrictive, a plan is permissive. A plan is something that tells you and informs you along the way. Think about this. When someone, a pilot, is setting course for a destination, they come up with a flight plan before they get in the air, before they even get in the cockpit, in the plane, they have a flight plan. So it informs the path to the destination. It's the same thing here. What's the plan for you? What's that Custom roadmap, that map on the financial journey you want to be on. And what makes a plan the way I plan different is That I don't look at it as restrictive. It's designed specifically around my goals, my dreams. So if you're going to create a plan, when we create the money Machine master plans with our clients, these bespoke plans with a portal and special software to make it happen.

We talk about their specific goals and dreams, not general stuff. What do they want, where do they want to go, do they want a vacation everywhere, how, how often? You know, every five years they want to get a new car. Every seven years they want to do a remodel on the house or so I don't know, whatever it is.

We create the plan that is specific to their goals, their dreams. And so they know that every time they are in alignment with the plan, they're moving closer to the dream life that they want. Now the second part of this is to realize that the plan is dynamic. It's not set it and forget it. It's not one dimensional, meaning that as life changes, it changes. So it's not set in stone. You end up getting married, you end up having children, you have grandchildren. You know, all those things create changes in the plan. So that plan needs to adjust with it. And then the other thing that we do with a plan is that you should look at different scenarios. If I'm going to have my money working for me, I need to know that it'll work for me in good times, bad times. Meaning that if the market's down or the economy's not so good, or if I stop working or if I have a health care, will the plan still get me to my destination? And when you build a plan that is built around your goals, your dreams, that is dynamic, that has been stress tested and using it to define the path and it's, and everything, it becomes the filter of all your spending. And not, it's not the thing that holds you back, it's the thing that propels you forward. Because now you spend without shame, without guilt, without regret, because you already planned for it. Okay? That leads to the third P and the third P is path. Okay? Once the plan's in place, you now can define the path. It's a clear route to the dream life. Whatever your dream life is, the plan defines the path. The only reason we need the plan is for the path. It tells me exactly what I need to do. Each year I spend time sit with my wealth team and we start to have a conversation. And I said, here's where we want to go. And they said, great, we need this from you, bring us this kind of money for the next couple of years and we'll take care of the rest. Great. I know what I got to do. What the plan is meant to do is give you a path. And overspending is an easy way to avoid.

Being on the path. It's that detour that. That that took you off. But when you have a plan and a path and a purpose in place, your destination is always in view. And it is the thing that's driving you. Now in this stage. One of the things that I have people do is I said, I want you to do a visualization exercise. I want you to picture that dream life. I want you to look at it and say, now understand that every dollar that comes into your world is either moving you closer to that dream life.

Or keeping you stuck where you are at or worse, moving you away from the dream life. And we avoid the things that keep us stuck. We avoid the things that move us backwards, and we focus on the things that move us forwards and we filter it through that. So now we have a path, and that leads to the last p. And that's priorities, because the path will then define the priorities. Now, there was a story that's told about the British, the UK rowing team. They didn't win.

Any kind of medals for a long, long time. And a new coach came in and.

He told them, this is our philosophy. The question we will always ask when we make a decision to do something with this team is will it make the boat go faster?

And if the answer to that question is no, then we don't do it. If the answer to that question is yes, then we make. We. We try it or we do it. That's the same thing with priorities. Remember I said that your current financial situation is a result of your habits, behaviors, and decisions of the past. Your priorities.

If it doesn't move you forward, then it's probably not worth you prioritizing it. The priorities are determined by my path. Not by impulses, not by emotions, not by trends, not by social media, not by anything else. I will always come back if I'm going to make a major decision or a spending decision. Back to the plan, back to the path and say, does it fit the priorities? Now, I know some of this feels like it's restrictive. So in the plan and the priorities, I want you to give yourself some space for fun. I call it three to four joy points. So I want to make sure that the things that give you visceral joy, okay, in our case, the biggest thing is traveling and our family. That's it. So it's not stuff, it's not, you know, neck technology and fancy cars. It is creating memories with the people we care about, with the movements, with the missions. And so we build it in the plan. When we're allocating the dollars, there's a portion that is allocated for that. What's yours? What are the joy points in your life that you can put in? Here's how I think about it. You know when, when you've done a diet and they say we give you a cheat day, it's not really a cheat day. It's a day to give you flexibility so you can stay on the path to where you want to get to from a well being, a health and a diet standpoint. That's what these are. It's the joy along the journey. Because here's what I know. If you do not enjoy the path to financial freedom, you will not enjoy the destination of financial freedom. And so we take three or four things that absolutely bring us tremendous amount of joy, lasting joy, not momentary pleasures. And we build it in the plan. So we have a fun fund, if you will, that allows us to do that. Now you're still going to be spending on you, but you're going to be doing it with purpose. Okay. You're going to be doing it with a plan. You're going to doing it while on path and you're going to have prioritize it. Those are the four P's. That's how we did it. All right, so how do you stop? Let's talk about an action plan. Let's talk about five steps I want you to take right now once you've done watching or listening to this and we'll get you dialed in. Okay? The first step is this. I want you to audit your spending. Track the last 90 days, go back, look at it. Okay. Or track the next 90 days. Okay. Either one. Okay. Track every dollar that goes out. Track what it is, how much it is and the emotions or what you were feeling when you spent it. That's going to allow you to do number two. Okay, so the first is audit the spending. The second is to eliminate the triggers. So number two, because we are tracking the feelings we had when we did the spending, you might see a pattern of spending triggers. Now you sit back and say, I spend when these things happen. Okay. Now we have to tweak the triggers. Now we have to eliminate the triggers. Maybe we have to unsubscribe for emails. Maybe we have to remove shopping apps from our, from our phones, from our devices. Okay. Maybe we need to put a cooldown period where we don't. We put something in a cart. We wait 48 hours or 72 hours before we complete a purchase, okay? So we eliminate the triggers in step two. Step three, automate your good decisions. Make your savings and investing.

Automatic. Put it on autopilot, okay? So you don't have to think about it. There's no friction to making it happen. And at the same time, put friction in your spending. Make it harder to spend. Take all your credit cards out of out of purchase apps, so you have to go back and put them in anytime you want to buy and then do not save it, okay? Make it hard. Number four, I kind of mentioned already 72 hour rule, okay? If you want something that's expensive, wait 72 hours before buying it. And if you still want it then, and you can afford it and you're not going into debt to do it, then go for it. But give yourself some time to cool down that you're not just going for a momentary dopamine hit. And number five, before you're spending, follow the 4P filter, the 4P framework, okay? Does it align with my purpose? Does it fit my plan? Is it part of the path and is it a priority? And you follow those five steps in the 4P filter and it'll change your destiny. It'll change the way you are. It'll change your journey to financial freedom, okay? Because true financial freedom is never, never about spending. It's about spending with intention. It's about getting my money to do the job that I need it to do, to give me the life that I want to have. Getting your money to work harder for you than you did for it, okay? Tying that money to the dream life. All right? I hope that this makes sense and I hope that this helps you kind of figure out if you're an overspender, how to put it under control. Because listen, we all have those tendencies. I do, too. I still do, but I still have. I now have a plan, a process, and a framework to follow. And so do you. All right, let me know what you thought. Let me know your comments, Let me know which one kind of hit home for you. And at the same time, do me a favor. If there's someone out there that could hear this message and it could help them share this out and make sure you're a subscriber to the show. I can't wait to chat with you as we go on this journey and can't wait to see you on the road to your financial freedom. And until I do, always, always strive to live a life that outlives you. See you in the next one.

Thank you for listening to Affluent Entrepreneurship with me, your host, Mel Abraham. If you want to achieve financial liberation to create an affluent lifestyle, join me in the Affluent Entrepreneur Facebook group now by going to melabraham.com group and I'll see you there.

And that's it for this episode of Building YOUR Money Machine where we help you learn how to master your money, eliminate financial stress, and live a life of choice. If you found this valuable or helpful to you, here's what I'd love for you to do. If you do me a favor, go to Apple, Apple Podcasts or wherever you're listening to this podcast and rate and review the show. It helps us tremendously to keep us at the top of the list so we can continue to get this information and this message out to people. Because I truly believe that financial freedom can your birthright and I want to help each and every one of you claim it. Thanks so much.