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ChatGPT can be a great resource for answering quick questions and even serving as a personal assistant. Although AI can’t and shouldn’t replace a trusted financial advisor, it can also be surprisingly helpful when it comes to practical financial advice.
Here’s what ChatGPT had to say when asked how to stop overspending.
Track Your Spending Like It’s Your Job
A Motley Fool Money survey found that 85% of Americans waste money at least occasionally, with frequent eating out being the most common, followed by impulse buys from online retailers and paying for unused streaming subscriptions.
According to ChatGPT, overspending can happen when you don’t monitor your spending. “Start by tracking every dollar for 30 days. You don’t need fancy tools; your bank app, a spreadsheet or a free app like Mint or YNAB (You Need A Budget) works,” ChatGPT said.
Once you see exactly where your money goes, you’ll be able to make adjustments and take better control of your spending. ChatGPT also recommended sorting your expenses into three buckets: essentials, lifestyle and impulse. “You’ll often find overspending lives in the last two,” it added.
Define ‘Enough’ and Stick to It
One of the biggest reasons people overspend is that they don’t know what “enough” looks like — enough clothes, tech, skincare, etc. — and it’s easy to chase more. “Set intentional limits based on your goals, not your feelings in the moment,” ChatGPT recommended.
ChatGPT also suggested creating personal spending caps in high-risk categories. For example, no more than $100 per month on takeout. When the money’s gone, you’re done.
Unlink Emotion From Purchases
Overspending habits can also become emotional, also known as “retail therapy.” According to Psychology Today, compensatory shopping, which is when we shop to fill an emotional void, is especially common when we’re stressed.
To avoid this, ChatGPT said to pause for 24 hours before any non-essential purchase. “If you still want it tomorrow — and it fits your budget — go ahead,” it said.
Automate the Responsible Stuff First
According to ChatGPT, most people spend first and save later if there’s anything left. “Flip the formula. Automate your savings, debt payments and essentials right after payday,” it said.
This can reduce temptation and force you to live on what’s left. ChatGPT also recommended treating savings like a bill. Allocate money toward your savings account, just as you would for essential bills.
Delete, Unfollow, Unsubscribe
You’re more likely to make a purchase when you constantly see items marketed across social media channels or receive promotional emails in your inbox. ChatGPT recommended unsubscribing from brand emails, unfollowing shopping influencers and turning off one-click payment options.
Use Cash for Temptation Zones
It’s much easier to pull out a debit or credit card rather than counting the cash and handing it over. “Want to cut back on one category fast? Switch to cash. It creates a physical boundary you can’t ignore,” ChatGPT said.
It also suggested using a cash envelope for your most tempting spending category, like Target runs or dining out. When it’s empty, then that’s it for the month.
Set a Real Financial Goal
It can be hard to stop overspending when you don’t have a reason beyond paying necessary bills. ChatGPT recommended defining your financial goal — whether that’s building an emergency fund, paying off credit card debt or taking a trip — the amount you need and a timeline.
It also said to make your goal visual. When you can see it in front of you, it can encourage more mindful spending.