Financial stability comes from following the basics of personal finance, like creating a budget, but there’s also an emotional element in attitudes and decision-making around money. One common financial challenge, overspending, can be eliminated with a combination of practical strategies and emotional understanding.

“People need to deal with the psychological side of money as well as the economic and financial side,” says Elizabeth Dunn, professor at the University of British Columbia and chief science officer at Happy Money. “People often have a lot of stress and baggage around money. Before we start talking about interest rates, let’s deal with all of the feelings and stress and issues that might be swirling around.”

Overspending can be defined as spending beyond one’s means, possibly due to a sudden event, like a job loss, or a slow evolution of financial behaviors. With energy costs up 41.6% year over year and grocery costs up 12.2% over the same period, inflation can also attribute to overspending – and the latest bout of rising prices have motivated many consumers to cut back.

“Due to high inflation, we’ve seen a shift in consumer behavior away from discretionary spending, as a bigger percentage of household budgets are spent on necessities, especially for food and gas,” Robert Frick, corporate economist at Navy Federal Credit Union, wrote in an email. “Spending on gas has an especially big effect on behavior, given we not only feel the pain each time we fill up, but we’re reminded of high gas prices every time we pass a gas station. However, gas has dropped 80 cents a gallon in the last couple of months, so it’s possible consumers will shift more money back to discretionary spending. The pent-up demand for leisure activities caused by the pandemic means the demand is there.”

Why We Overspend

While every individual’s spending habits are unique to his or her circumstances, Shari Greco Reiches, co-founder, principal and chief visionary officer at Rappaport Reiches Capital Management in Illinois, says a few common issues tend to be responsible for overspending.

Lifestyle creep, for example, occurs when individuals gradually increase their spending over time and often accounts for unrecognized overspending. Greco Reiches says individuals who fail to plan or lack a decision-making process for making purchases can also find it difficult to control their spending.

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“Plan ahead. If that trip is important to you, maybe go off season. Go when there’s a special. When you go to the grocery store, have a list,” she says. “If you know you have a big event and need a fancy dress, don’t wait until the week of to start looking.”