Overspending is a real problem that many people go through. It may seem like a problem that only afflicts the rich. However, there are many people who spend even if they don’t have the money. There are many reasons that lead to overspending. Generally, overspending results from poor financial habits and emotional or social needs. To go deeper into the root of overspending, here is a list of common reasons why people overspend.
1. Paying with Plastic
Many people end up overspending because they pay for purchases using credit cards. Credit is not actual money but the result of using it is the same, only without concrete limits. They spend and spend only to end up not actually being able to pay for everything. Paying with debit cards is also just as bad. They have easy access to their money and it feels like the funds are inexhaustible. But in reality, they can spend all their money without noticing that they did.
2. Not Having a Written Budget
A written budget helps you keep track of their spending. If you can see how much money is going in, then you will know how much you can spend without going broke. Likewise, if you see how much money you are spending, you will know what to modify in your spending habits. People who don’t take time to create a written budget will find it hard to keep track of their money. Before they know it, they have spent more than they should have.
3. Shopping without a List
Shopping without a list is like taking an exam without studying for it. People who go into a shop without a list are more prone to buy anything that catches their eye. They are more likely to end up buying things they don’t actually need. They can also spend more than they originally thought they would or should have.
4. Buying Items on Sale
Buying things that are on sale can be a bit tricky. First, just because something is on sale doesn’t mean that you are getting a bargain. Second, you can go to a sale and see all the limited pretty things on the racks. You get the urge to buy something even if you don’t really need it because of the reduced price. Going to a sale, especially without a shopping list, can definitely lead people to overspend.
5. To Keep up a Reputation
Money and the things it can buy is a way to establish and keep a reputation or an image. It seems like a lot of people overspend because they feel like people will judge them based on how much they spend, as well as what they spend their money on.
6. To Measure Their Worth as a Person
Many people measure their worth by their possessions. The more expensive the purchases, the better they feel about themselves. Even if they don’t have the money, they still feel compelled to spend to have an ego boost.
7. To Feel Powerful and in Control
Money gives people a sense of power and control. The more money they spend, the more powerful they feel, the better they think their life is. However, once they are done spending money, the control and power they feel also vanishes. They have to spend more and more to get the same rush. It becomes a cycle and a kind of addiction.
8. To Fill a Void
Money, or more specifically shopping, is used by many to fill a void in their lives. It’s as if the more stuff they have the more fulfilled or satisfied they will be. In reality, no amount of stuff can fill the emptiness inside. If the emotional void is not explored and addressed in depth, then the shopping and spending may continue.
The road to financial recovery begins when you take time to identify the cause of your overspending. The reasons listed in the list are just some of the reasons that people overspend. You may have your own issues and reasons. Remember that you cannot wish yourself debt-free; you have to actively find solutions to the underlying problems of your overspending.
Top image source: thesmarterwallet.com