With credit cards and online shopping, overspending has become an issue for many people. After all, who wouldn’t be tempted by brands offering free shipping and organizing flash sales? A few minutes on the internet can result in you spending a few hundred dollars.
Unsure whether you have an overspending problem? Then this article is for you.
Here are the signs to look for that may indicate you’re overspending.
5 Signs You’re Overspending
1. You have no idea how much money you spend every month
Earning money isn’t an easy task. You have to work hard for it. But, it is also possible that you spent it without having the exact knowledge of where it goes. If you don’t track your spending, it might be possible that you end up overspending in some areas.
Marketers and advertisers work diligently to entice you to spend your hard-earned money. You might be tempted to spend more than you can afford. This will lead you to buy things that you don’t need.
2. Your credit cards are maxed out
If you have spent your credit card limit or have no idea how much money you owe, it is a clear sign of your overspending habit.
When you don’t have the cash to pay and use your credit card, you’re willing to spend more. In fact, there have been studies that have proven that when people pay using their credit card, it doesn’t feel like a loss—something that they feel when they pay by cash. This phenomenon is often referred to as “friction-free spending”.
3. Your email account is full of shipping and order updates emails.
If most of your emails are from your favorite online store, it might be a sign that you have been spending a lot of time there. Viewing these emails will tempt you even more to respond. These emails have been created specifically to entice you to make the purchase.
Think about this—what good would come from saving 40% if you are spending money that you didn’t actually plan to spend? It’s better that you unsubscribe from these newsletters.
4. You’re surprised when orders are delivered to your home
Has it ever happened to you that you got a parcel delivered, but cannot recall what you ordered? If your answer is yes, it might be a sign that you have been spending money making impulse purchases.
Making multiple purchases at the same time might make you forget about a few things on your orders list. Yes, online shopping is convenient, but if you are surprised by a package on your doorstep, you should step away for a few weeks and detox.
5. You have clothes with the tags
The ideal clothing to shop for are the clothes you plan to use immediately. Buying clothes that you “might need in the future” is a definite sign of overspending.
If you have clothes in your closet with tags on them or you haven’t worn them because you are saving them for an unspecified event in the future, it’s recommended that you clean out your closet and control your impulse to shop for hypothetical situations. You likely only wear a small percentage of your clothes on a regular basis anyway.
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Now that you know about these common signs of overspending, let’s discuss what you can do about it.
5 Ways to Curb Your Overspending
1. Track your spending
One of the best things that you can do for your financial situation is to track your spending. You might think that you don’t need to track every little purchase you make, but the truth is that these little purchases can add up quickly. This includes your morning coffee, buying a magazine, picking up a pastry, or eating out.
If you don’t track your spending, you might end up with a low balance and buyer’s remorse. Remember that tracking your expenses is a must for successful budgeting.
2. Know your triggers
Not all people spend their money on clothes. You have your own triggers. For example, you might have a tendency to overspend on food, stationery, etc.
It’s important that you know what your triggers are in order to better control it. So, if you are hungry, eat something before you go out shopping for groceries. If you’re feeling down, wait before this emotional state passes, and don’t go on to purchase any luxury item.
Before you make any purchase, take a moment and ask yourself whether you really need this.
3. Use cash
When you are creating your budget, use cash. This way, you will have to stick to your plan. Once the cash has run out, you won’t be able to overspend. Make sure that you assign a fixed amount to all your expenses.
Another way you can stick to cash-only budgeting is by keeping money for the week aside and taking it out as needed. Depending on your expenses and spending habits, you can do what helps you stick to your budget.
4. Have short-term financial goals
One common habit of overspenders is to make expensive purchases on credit cards and not pay them off immediately. They are more focused on the “here and now” instead of the future.
However, if you want to change this habit, you should have some attainable and feasible short-term goals. You can save some percentage of your paycheck every month to attain these goals.
Having these short-term goals will allow you to change your viewpoint about money. And, once you have achieved one of them, don’t forget to pat yourself on the back.
5. Don’t take your credit card
Credit cards can be beneficial. However, you don’t have to take them everywhere with you.
For instance, if you are going out to the mall, instead of your credit cards, take cash. This way, you won’t be tempted to make a spur-of-the-moment purchase with your credit card. If you shop online often, don’t save your credit card information, or else you might fall prey to impulse shopping.
Overspending can be a tough habit to quit. But, with dedication and a few tips, you can save yourself from a lot of trouble.
About the writer
Quotacy is the country’s leading broker for buying life insurance online. We are obsessed with making it easy for everyone who has loved ones who depend upon them to have life insurance.