How to Stop Spending Money

What Is a Spend Circle and Why It Matters

Your Spend Circle refers to the spending habits of the people within your social group. People generally tend to associate with others of similar wealth and social status. This social pattern is common in countries such as the United Kingdom and the United States, where wealth and material possessions heavily impact social status. People often connect based on the material things they own.

The issue arises when you find yourself stuck in a spending circle that exceeds your means, leading to money problems. Since the average UK adult spends £ 722.60 more than their disposable income each month, it's evident that social pressures are compelling people to spend beyond their means. Like Rich, you may find yourself making extra efforts to fit in.

I knew a guy, we'll call Rich, who loved partying. We're talking Dom Perignon and Belvedere — by the bottle. He moved in circles with super-wealthy people who wouldn't blink at a £2-3k night out. But he was different. He didn't have the seven-figure salary or a mansion on Brompton Square. Instead, he relied on credit cards — many of them. Caught in a vicious cycle of nights out, desperately trying to keep up with the Joneses, all while drowning in staggering credit card debt.

When Rich approached me, he was overwhelmed with over £50,000 in credit card debt and was looking for guidance. To give some context, the typical UK adult has around £1,308 in credit card debt, so Rich's debt was nearly 40 times that. He was caught in a Spend Circle and struggling to keep up financially. The broader picture shows that 23% of UK adults own three or more credit cards, which can, unfortunately, lead to heavy debt buildup.

We'll return to Rich's situation shortly, but first, let's understand why this happens.

From School Trainers to Range Rovers: Keeping Up with the Joneses

The desire to fit in drives people to incur debt they can't afford. Have you ever caught yourself doing something just to avoid feeling isolated or excluded from a group? Think back to your school days, when having the latest trainers, clothes, or mobile phones was essential to belong to the 'in crowd.' This pursuit of acceptance continues to affect many, now more prominently with things like a new Range Rover, a four-bedroom house near top schools, or expensive midweek meals with friends that are way out of your budget.

Research shows that 19% of UK adults see clothes and accessories shopping as a key contributor to their debt problems, directly linked to the pressure to maintain appearances. Although the spending triggers change, the psychological process stays the same.

Why Fitting In Is Costing You Financial Freedom

The truth is that many people, at some point in their lives, may find themselves in a Spend Circle that feels uncontrollable, with a risk of financial difficulty hanging over them. However, there is a way to regain control. The Money Charity reports that the total unsecured debt per UK adult is £4,161, much of which is driven by social spending pressure rather than genuine necessity.

When you stop trying to fit into circles you can't afford, you take back control not only of your finances but also of your mental health. Intrum's research shows that 26% of UK consumers have experienced mental health challenges because of financial pressures, with the ongoing stress of trying to sustain an unsustainable lifestyle being a key factor.

Strategy #1: Find a Spend Circle That Matches Your Budget

Don't fall prey to the temptation to surround yourself with people who have everything you wish you had. This isn't healthy for you or your bank balance. Remove yourself from situations where you hear yourself saying, "Sorry, that's too expensive" or "I can't afford it," but can't bring yourself to tell those in your Spend Circle. You want the people in your Spend Circle to accept your spending limits or, even better, share the same ones as you. If that's not the case, leave and leave quickly. Find a Spend Circle that is comfortable for you.

This isn't about abandoning friends; it's about protecting your financial health. The typical UK household now carries a total debt of £65,479, much of which is due to keeping up social appearances. Genuine friends will respect your boundaries, while others are only interested in your money, not your well-being.

Strategy #2: Go Cash-Only to Regain Financial Awareness

With the rise of easy-pay systems like Apple Pay, we're quickly moving into a world where cash is no longer the primary method of payment. Cash should be viewed as your friend. Consider this: if you withdraw £200 in cash and leave your card at home, you become more aware of what you have available to spend and more mindful of how you choose to spend that money. With a card, it almost feels limitless; you're effectively carrying your entire bank account.

Let's say your bank account has a balance of £2,000. Now picture that as cash in your pocket. Even worse, you have a credit card with a £5,000 limit. Imagine that as cash in your pocket. The truth is that it isn't even your money.

This psychological disconnect is real. Studies indicate that people spend 12-18% more when using cards rather than cash because the abstract nature of digital payments reduces the "pain of paying." When you physically hand over cash, you feel the loss immediately.

Looking back, I recall my grandparents and parents always paying with cash. Whenever my dad went shopping, he carried exactly the amount he planned to spend in cash. I never saw him use an ATM or cash machine; instead, he would go directly to the bank to withdraw the cash. He never had a credit card.

If you find managing your spending difficult, consider a practical method: use your debit card solely to withdraw cash and avoid using it for transactions. A useful strategy is to calculate your remaining balance after all your regular payments, such as council tax, water, gas, or electricity bills, have been deducted, and then withdraw the rest in cash. The physical presence of cash offers a real sense of your financial situation that tapping a contactless card cannot.

Strategy #3: Cut Up Your Credit Cards (The Cold Turkey Approach)

If you're used to relying on credit, this might feel difficult, but cancelling your credit cards and other credit facilities could be the only way to manage your finances. If possible, avoid leaving any source of temptation. Remember, with no credit facilities, you can only spend what you have.

This is a rip-the-band-aid-off, cold turkey moment designed to help you improve your finances.

With outstanding credit card debt in the UK reaching £73.2 billion in March 2025 and rising above £76.1 billion by August 2025, and 65% of UK adults owning at least one credit card, these pieces of plastic pose the greatest threat to financial control. The average interest rate on credit cards now stands at 24.66% APR in January 2026—the highest in over 30 years—meaning that a debt of £50,000 like Rich's could cost over £12,330 annually in interest alone.

Get yourself into a comfortable position where you control your spending, and it doesn't control you. Once you're here and mentally in charge, allow yourself access to a credit facility to build up your credit rating for "good debt," like a mortgage.

Strategy #4: Make Your Money Work for You Through Saving and Investing

The final tip is to always have a savings or investment outlet for your money. Some people spend money because it is just sitting there, burning a hole in their bank account. The truth is that your money should be working for you at all times.

Sometimes, you're unsure how to make your money work for you. In such cases, it's best to place your funds in a suitable vehicle, such as an ISA or a savings account, until you find a purpose for them. As a rule of thumb, you should have no money in your current account the day before you're paid. Transfer any extra cash to a savings account or an investment.

Program your mind to establish a habit of saving and investing. You will value this tip when major life changes occur that require a cash boost. The UK ISA allowance for 2025/26 is set at £20,000, offering a tax-efficient way to save while you consider longer-term investment options.

The debt crisis in Britain is more widespread than it seems. Did you know that 63% of UK adults have dealt with some kind of debt at some point? It’s important to remember that struggling financially isn’t a personal failing, but a common experience. On average, adults owe about £4,161 in unsecured debt, and when you include mortgages, the total household debt reaches a substantial £65,479.

Credit card debt alone has risen to £69.6 billion nationwide, with the average amount owed per active credit card reaching £1,845. These figures clarify why 38% of UK consumers say high living costs have caused a lasting negative impact on their financial wellbeing.

You're not broken—the system is designed to make spending effortless and saving difficult. Understanding this is the first step towards regaining control.

The Real Debt Guy is a qualified financial adviser and a UK debt expert. The information in this article is considered to be true and correct at the publication date.