Are You Overspending? Here Are Some of the Reasons Why!

‘I can resist everything except temptation’ – Oscar Wilde

Does checking your bank balance give you anxiety? Do you seem to never have enough money for your needs and wants despite earning well? Is it hard to control your shopping urges?

Then you may be a victim of overspending.

We’ve all been there. The best of us have trouble curbing our spending. The latest smartphone, a festival sale, great recommendations by friends – all of these are reasons we give ourselves when we want to purchase something that we probably shouldn’t. 

The good news is that overspending can be controlled. In this II – part series blog, we’ll take a look at some of the common reasons for overspending and how you can curb this.

The Why’s and How’s of Overspending

Let us take a look at some of the common causes of overspending –

• Easy Access to Cash or Credit

We live in a world where so much is available at your fingertips, including credit. One can easily get personal loans or even credit cards within hours online. This ease of access can be tempting and lead you to spend unnecessarily.

For example, maybe you really want that new phone or that high-end Bluetooth speaker. Do you have the money to pay for it in your savings account? Then perhaps you can consider this purchase. But if you are planning to get credit just for these purchases, then you are definitely overspending.

It also doesn’t help that we are always inundated with multiple offers for credit. While it may be tempting to give in to these offers, first check if you need it and can handle it responsibly.

• Spending Makes You ‘Feel Good’

One of the most common reasons for overspending is your emotions because it feels good to buy certain things. 

Our emotions and feelings have a significant impact on your purchasing habits. If you’re someone who indulges in retail therapy or shopping as a way to make yourself feel better, you are only harming your financial health in the long run. Lack of discipline can be detrimental in more ways than one and this is true even for your finances.

While having some ‘fun money’ for yourself is alright, it must be limited.

• Lack of Financial Planning

There is a reason why financial experts stress on the need for a budget. Not having a financial plan is an invitation for unnecessary spending. If you do not have a budget or a clear plan for your monthly expenditures then it is very easy to drift off course and you may not even be aware of how much you’re unnecessarily spending until you get your bills.

• Lack of Financial Goals

An offshoot of the previous point, not having a financial goal is like traveling without having a destination in mind. A financial goal can be as simple and achievable as saving 2% more than the previous month (unless you’re living paycheck to paycheck) or something as lofty as owning a house in the next 5 years.

Having a goal, especially one that is inspiring will help you stay motivated and disciplined when it comes to your finances and will definitely curb overspending.

• Consumerism

We live in a highly consumer-centric society where we are constantly bombarded by advertisements and appeals to keep buying. We are told that to feel a certain way, we need to purchase a product or service and that we need ‘more’ to be satisfied. 

It is very easy to be taken in by these messages and spending on items that we may never need. This is  especially true if you are not disciplined enough with your money. Not only does this affect our mental health, our finances will also suffer. 

Final Thoughts

Money does, in fact, bring happiness but only if utilized properly. One of the simplest ways to become financially independent is to spend less than you earn. 

Overspending, getting into a debt cycle, unnecessary spending are all habits that can significantly deter your financial health. Some of the common causes of overspending include a lack of financial planning and goals and impulsive spending.

In part – II of this blog next week, we will take you through some of the steps you can take to control overspending.