NerdWallet's Smart Money Podcast
The Price Isn’t Right: How to Stop Overspending and Stay Debt-Free
Mon, 03 Feb 2025
Break free from debt cycles and rethink your spending habits with tips on no-buy challenges and financial therapy. How can you stop falling into a cycle of paying off debt, only to rack it back up again? What is a no-buy year, and how can it help you control your spending? Hosts Sean Pyles and Elizabeth Ayoola discuss strategies for breaking unhealthy spending patterns and staying out of debt for good. They begin with a conversation about the benefits of a no-buy year with NerdWallet personal finance writer Amanda Barroso, who shares tips on setting clear spending rules, resisting impulse purchases, and tracking progress to reinforce financial discipline. Then, Sean welcomes co-host Sara Rathner and personal finance Nerd Melissa Lambarena to dive into a listener’s struggle with recurring credit card debt. They discuss the psychological factors behind compulsive spending, the benefits of financial therapy, and practical steps to curb overspending, including strategies for budgeting, limiting credit card use, and practicing delayed gratification. Read NerdWallet’s write-up of the best no balance transfer fee credit cards to help you compare your options for ways to climb out of debt: https://www.nerdwallet.com/article/credit-cards/best-no-balance-transfer-fee-credit-cards In their conversation, the Nerds discuss: credit card debt, how to stop overspending, no-buy year, budgeting tips, financial therapy, money habits, debt cycle, breaking bad money habits, impulse spending, debt-free living, financial discipline, how to stop using credit cards, saving money strategies, debt management, mindful spending, financial goals, spending freeze, personal finance tips, credit card traps, emotional spending, how to budget, debt repayment, how to stay out of debt, no-spend challenge, frugal living, debt-free journey, saving money on shopping, financial accountability, budget planner, financial self-control, spending detox, credit card debt help, how to stop living paycheck to paycheck, best budgeting methods, overcoming debt, financial self-awareness, debt-free motivation, and how to track spending habits. To send the Nerds your money questions, call or text the Nerd hotline at 901-730-6373 or email [email protected]. Like what you hear? Please leave us a review and tell a friend. Learn more about your ad choices. Visit megaphone.fm/adchoices
Chapter 1: What is a no-buy year and how does it work?
And what if that something is harming your personal and financial lives? This episode will help you break that bad habit for good. Welcome to NerdWallet's Smart Money Podcast. I'm Sean Piles.
And I'm Elizabeth Iola.
This episode, I'm joined by Sarah Rathner to answer a listener's question about how to stop a debt spiral from blowing up their life.
But first, we are going to talk about what you can get from doing a low or no buy year. So here to talk with us about this is NerdWallet personal finance writer, Amanda Barroso. Amanda, welcome back to Smart Money. Hi there, Shawn and Elizabeth. Thanks so much for having me back. All right, Amanda. So to start, can you lay out exactly how a no or low buy year works and what's your goal?
So the gist of a low buy or no buy is to create, you know, one or more spending goals for yourself and to stick to those goals for a certain period of time. So it could be a year like what I'm trying to do here, but it could also be shorter like a month. If you're anything.
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Chapter 2: What are the benefits of participating in a no-buy challenge?
like me, your social media feeds were full of people doing low buy or no buy challenges in December, at least sort of setting up their challenges for the new year. As I was scrolling through those videos, it really got me thinking about my own spending habits and what goals I wanted to set for myself in the new year.
Cutting back on areas of overspending and encouraging more mindful consumption are my two main goals, but there are others that you could pick too, like reducing clutter or making more ethical consumption choices.
So it seems like the overarching goal of a low or a no buy, however you want to do it, is to really reset kind of from the ground up how you are thinking about your spending habits.
That sounds right. Yeah.
What are the specific rules guiding your no buy year, Amanda?
This is a tough question. This is like something I really sat and was trying to be really conscientious about. I think if I had to sum up my big goal for this year, it would be this. Like, this is sort of like my mission statement. I want to have less financial stress, a more thoughtfully curated life, and the freedom to plan new experiences without guilt. So that's my little mission statement.
One of my biggest goals for the year is not buying any new clothes. I'm allowing myself to thrift clothes or to buy secondhand, but the items that I purchase, this is the rub, the items that I purchase have to be made of better quality than what I currently have. So we're talking 100% cotton, we're talking wool, we're talking cashmere, silk, denim, no more plastic clothes.
I really want to build a closet that I love and that also reflects my personal style. And, you know, it's changed a lot. I have two kids. I just turned 40 last year. And so I've just sort of decided I'm not going to be spending any money on plastic clothes anymore. The other thing is non-essential items. So makeup, perfume, like unless I need to replace something, I'm not buying it this year.
I'm also putting a moratorium on household decor. And listen, HomeGoods used to love to see me coming. We have everything we need in this house to make it cozy, to make it comfortable. I can still take advantage of thrift stores to purchase items, but I'm looking to be more intentional and less susceptible to trends. And maybe you can feel me on that one.
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Chapter 3: How can financial therapy help with overspending?
The same goes for new books. I love to read and I would say it's one of my biggest hobbies. And really, I want to have like a robust home library that reflects a wide range of genres and topics. But books are free at the library. Did you guys know this?
Or on your own bookshelves. Look at the books you've already purchased.
Listen, don't attack me, Sean, about my TBR. I hear you. I hear you.
Speaking of attacking, Amanda, I feel like you're screaming at me with the no new clothes thing, okay? Okay. So I definitely felt that. But Amanda, have you heard of the Libby app?
You know, I have. And in fact, it's downloaded onto my phone. Thank you, ma'am.
I hear it allows you to borrow e-books and audio books from your local library. But if the book you want isn't available on Libby, then you can just check thriftbooks.com for inexpensive used books.
I have heard Libby is great. And it is true that there are used bookstores in town that I could take advantage of. And you mentioned thrift books. I love online discount booksellers, especially for kids' seasonal books. Like you can catch me at night scrolling and just seeing what I can pick up there. So those are all super great tips.
And speaking of buying things for my kids, the next rule is going to be hard for me. And maybe other parents can relate. Here's the rule. No new kids' toys unless it's like a birthday or a holiday. Elizabeth. Now, listen, I tend to splurge on my kids and I don't know how you feel about your son, but like I buy them this toy. We're out. You know, can I mommy, can I have this?
And they end up playing with the new toy for approximately six hours and then ditching it. And the kids have more than enough. And I think what I've decided is that I'm going to focus on toy rotation. So putting some toys away in the closet and every few weeks freshening them up, putting some things away, bringing some new things out.
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Chapter 4: What are practical steps to curb impulse spending?
All right. So honestly, I haven't bought my son a new toy in a while for similar reasons. And every time he asked me for a new toy, I tell him to play with the ones that he has first, especially the ones that I stepped on. And it works like magic. And since this is a space where we listen, but we don't judge, I am currently stewing about buying him a Nintendo Switch for his birthday.
He begged for it for a year straight only to watch it collect dust on my office desk.
These are hard lessons to learn.
Elizabeth, you may not know this, but the Switch 2 is coming out in just a couple of months. So I'm pretty sure you're going to have to buy that for yourself.
Absolutely not.
Absolutely not.
That's a devastating lesson to learn as a parent. I have my similar ones to learn about the thing that they begged for now simply collecting dust in the corner. It's tough.
So Amanda, earlier this year on the podcast, we talked about things that we wanted to leave behind in 2024. And mine was leaving behind overly restrictive financial rules because I always end up rebelling against myself. I imagine that some folks listening might wonder whether Amanda, whether your rules are sustainable or what kind of wiggle room there might be in these rules.
Okay, so the last thing that I want to do is set myself up to fail, right? Life is hard enough. So I've carved out like pre-planned days or events where I'm giving myself permission to spend. For example, my husband and I have already booked this trip to go to the mountains for my birthday in October.
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Chapter 5: How can you track your spending habits effectively?
Yeah. I saw this funny meme on maybe Instagram that was like, treat yourself. And I never stopped treating myself after. So that's how I feel sometimes.
Well, Amanda, after a whole year of changing your spending habits in this pretty dramatic way, how will you know whether it was a success?
Listen, if I can hire a house cleaner, I say this jokingly, but I really want to feel more in control of what comes into my home. And I want to use the money that I would have spent on just like stuff to help solve this other pain point in my life, which is cleaning my house. That would free up time, energy, anger, all of these things that every time I have to scrub my shower, I cycle through.
But, you know, I'm also hoping to use the time I spent online shopping to reinvest into building a community and hobbies. Shopping is not a hobby, even though I think I might have described it that way. Like, Amanda, what are your hobbies? Oh, I like to shop. It's not a hobby. I want to put my energy into relationships and doing things that I love, not making returns to Old Navy.
And I'm not here to slander Old Navy. But when the woman at the cash register begins to recognize you... which is something that happened to me. Like, I knew something had to change. And then becoming uneasily influenced, I think, is going to be another huge marker of my success. Like, why am I letting strangers on the internet tell me what I need?
I want to give them less power and space in my brain without giving up the internet altogether. Like, I've got to figure out how to strike that balance, you know? There's a lot of community to be had online. But being online doesn't mean that I need to be spending money.
Yeah, one resource for that is the anti-consumption subreddit. I find that to be a really vibrant place for folks to talk and share tips for not spending or consuming as much.
I love that. I need to join that. Me too.
Well, Amanda, if folks are interested in starting a no-buy year or maybe just a month, what's your advice for them? Where should they start?
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Chapter 6: What strategies can help with budgeting and staying debt-free?
When it comes to setting your rules, I found it really, really helpful to see what others on social media were doing. Just searching for low buy or no buy in the search bar turns up tons of users who are participating in the same kinds of challenges. You could watch their videos, see what rules resonate with you.
It's also nice to plug into these spaces so you can feel a sense of solidarity and accountability.
Amanda, I am inspired, okay? And I hope that listeners are too. So Amanda Borosso, thank you so much for joining us.
Thanks for having me, y'all.
All right, we're about to get into this episode's money question segment. But before we do that, listener, you know what time it is. It's that part of the show where we ask you to take a moment and think about where you could use a little nerdy financial wisdom.
Maybe you're feeling inspired by the last conversation and want to overhaul your spending habits, but want a little more guidance. Or maybe you're preparing to buy a home later this year and want to make sure your credit is in good shape. Whatever your money question, we nerds can help you.
Leave us a voicemail or text us on the nerd hotline at 901-730-6373. That's 901-730-NERD. Or email us at podcast at nerdwallet.com.
And we're planning to talk with even more of you live on the podcast this year. So if you want to join us to talk about your money question, just let us know. One more time, leave us a voicemail or text us on the Nerd Hotline at 901-730-6373. That's 901-730-NERD. Or you can email us at podcast at nerdwallet.com.
Okay, now let's get to this episode's money question segment, where I'm joined by Sarah Rathner to help a listener break a destructive debt habit. That's coming up in a moment. Stay with us. Today's episode is sponsored by Range Rover Sport.
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Chapter 7: How to deal with emotional spending triggers?
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Again, explore the Range Rover Sport at LandRoverUSA.com. We're back and answering your real-world money questions to help you make smarter financial decisions. This episode's question comes from a listener's text message. Here it is. I have had basically nonstop credit card debt since I was 18 years old and got my first credit card. I'm 40 now.
I go through the cycle of racking up thousands of dollars on my credit card and maintaining it for years. About three or four times over the last 20 years, I've basically paid off all my debt. But then I go, oh, perfect time for this expensive vacation or other such irresponsible things and continue to live outside of my means just to rack up debt again.
I've once again paid off all my credit card debt, and I desperately don't want to fall back into the cycle, and my husband has warned me that I cannot do it again. I need tips on how to live within my means and remain debt-free.
To help us answer this listener's question, on this episode of the podcast, we're joined by Melissa Lamberina. Melissa is a personal finance writer whose work has been featured by the Associated Press, The New York Times, Chicago Tribune, The Washington Post, USA Today, and Yahoo Finance, among others. Melissa, welcome. Thank you for having me. It's a pleasure to be here.
Melissa, I hope that you are in a comfortable seat because I think we will all be armchair financial therapists this episode, and I'm only really half getting there. But I'm wondering, what are your initial thoughts about our listeners' long-term debt problem?
First, I want to applaud the awareness of the listener in identifying this pattern and repetitive cycle because that's a key first step. The next step is seeking advice to make a change in their financial journey. So they're already taking these steps and I think that's a great place to start.
It appears that they are aware of what's leading to the debt, but perhaps despite their best efforts, they have not been able to break this cycle. Since it doesn't appear that it's due to an unexpected emergency or perhaps a matter of lack of funds, then I would urge them to consider perhaps seeking financial therapy.
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Chapter 8: What are some tips for mindful consumption?
For some people, it can be really hard to admit that they might need a little bit of help. But the truth is that we all do now and then, and those who seek it can get to their goals much faster.
I agree. And financial therapy is this burgeoning subfield within the field of therapy. And there's a really good reason for that. You know, we learn certain money behaviors and patterns well before we manage our own money. I mean, children pick this stuff up well before they can even really express themselves. That's how young this stuff begins to show up.
It seems like these patterns not only are affecting the listener's goals in life and their ability to live a life that would make them happy, but it is also affecting their relationship with their spouse. That means that there may be some relationship conflict going on that really would benefit from being talked about with a neutral third party.
Yeah, I so wish that we could talk with this listener because I would love to hear more about the why behind their debt. From their message, it does seem clear they're not going to this debt to cover necessities. They are knowingly living outside of their means, and it seems like they're making decisions that they know are not in their best interest, like going on expensive vacations.
I'm very curious about their thought process when they have gone back into debt. What is it that they expect this spending to achieve for them in the long run, even if they know it's actually not good for them to be doing this?
I would have to speculate here, but it's possible that they might be rewarding themselves after paying off a mountain of debt because it sounds like that this is something that they do. They feel free to spend once they have paid off their debt and then the cycle continues. It's important to get to the root of why they choose to overspend when they get out of debt.
Sometimes it's because you felt deprived for so long if you had a really strict get out of debt plan. And once you're out of debt, there's less of a risk to splurging or overspending, at least in the immediate form. A financial therapist can potentially help you get to the bottom of it. And it sounds like that's what the listener wants to break this cycle.
It's important to note financial therapy does cost money, so that may present an obstacle when you're already struggling financially. But it could still be a worthy investment if it offers a long-term solution that can keep you out of debt and save you money over time. Consider the benefits that it might mean for your lifestyle, for your goals, or even relationships that it might be hurting.
Yeah, you know, I'm somebody who's gone to non-financial therapy over the years on and off, and it is a cost, but I consider it an investment in yourself. Sometimes in life, you need to assemble what I call the paid village of care. We always say it takes a village. Sometimes you talk about that in terms of having kids, but adults need their village, too.
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