Many of us have a problem with over spending. You get to the end of the month and realize that you don’t have enough money. Out come the credit cards. In some cases, you might even have a budget or spending plan meant to help you limit your spending — and still you might spend more than you really want to.
Before you can fix your problem with over spending, you need to determine the “why” behind regularly exceeding your income each month. Here are some possible reasons that you might be over spending:
Not Keeping Track of Your Spending
Even if you have a budget, you might not be tracking your spending as closely as you should be. I used to keep track of my checking account spending, without paying as much attention to credit card spending. Other times, it’s easy to forget to add online purchases to your ledger, or to your personal finance software. And, even though there are ways to automatically update with apps that get information from your bank account, there can sometimes be a delay before your available balance is properly updated.
You will be less inclined to over spend if you truly know how much you have spent, and how much you have left. Make sure to track your spending so you can keep your expenditures under control.
Looking for an Emotional Boost
For some people, spending provides an emotional boost. If you have been under emotional stress, it can lead to over spending. You might be tracking your expenses, but being under stress can result in spending more than you had planned — and not caring very much.
Shopping can offer stress relief, and even if money is the source of stress, spending more can be a way to cope with worries about finances. When you know that you have certain triggers, it’s best to avoid them, and it is important to make the effort to avoid shopping while emotionally compromised.
Don’t Want to Wait
More on Money Psychology
Another issue is instant gratification. We live in a world where you are told that you “deserve” whatever you want…right now. In some ways, it’s more satisfying to be able to purchase desired items immediately. Instead of saving up, you might pull out the credit card, or you might spend money on a want right now, and find that you don’t have money left over for everything that you need. Combine your spending plan with short-term and long-term goals, and try saving up for larger purchases. You will likely stay within your monthly budget when you plan to save up by increments, rather than making a big purchase all at once.
Trying to Keep Up with Others
Another common reason for overspending is trying to keep up with others. When you want to appear richer than you are, it is tempting to spend more than you have. Indeed, many people go into debt in order to appear richer than they are. When you spend to impress others, it’s easy to stop caring that you exceed your income each month. Be honest. If your motivation to spend comes from a desire to impress someone else, it might be time to re-assess your priorities when it means you overrun your income.
Only when you understand the underlying reasons for your overspending can you begin to address the causes. Honest evaluate your motivations. Next, tackle the root of your over spending problem and work out a plan to change your habits.
Miranda is freelance journalist. She specializes in topics related to money, especially personal finance, small business, and investing. You can read more of my writing at Planting Money Seeds.