Everyone seeks for financial freedom. But to spend less than what we earn is really difficult. We tend to overspend and end up justifying ourselves. In order to stop ourselves from overspending, it’s important to identify the roots of this problem first.
Impulse of buying
Sometimes the forces of advertising and marketing can be too powerful to overcome. We may even be prompted by a product strategic placement. Once it triggers our impulse of buying, we rush into our wallets without a second thought.
To avoid the impulse of buying, try to make a list before you go shopping, and stick to that list. If you have things in mind that you want to purchase, make a plan and save money before you do the purchase. With this process, your purchases will become more deliberate and less on impulse.
Influence of stress
Being under the influence of stress leads to more shopping. Researchers found that shopping can actually be therapeutic to many people.
But overspending is not a cure to stress, instead, it brings more stress to you in the future. Stress is inevitable, but there are healthier ways to manage it, such as yoga.
You may be allured with the convenience of using credit card. The feeling of guilt is different than when you are using cash to pay, which makes you think it’s okay to spend more.
Purchasing with a credit card could be really tempting and people tend to rely heavily on it. Set a personal spending limit. At least stay within 30% of the credit card’s limit to help maintain your credit score.
There are times when we let the people we know have too much influence on our expenses. Maybe it was the costly group outing or your friend just bought an iPhone.
When it comes to a costly group outing, tell your friends about your financial constraints. Besides, honesty is the best policy. Make suggestions to a more affordable place for the group outing.
Secondly, if you find yourself tempted to keep up with others, stop. Focus on yourself. Things aren’t always what they seem, your peers could be in pressure into those big purchases.
Being on vacation
Vacation is a great way to release stress and escape from our daily routine. But if you abandon your financial obligations back home and overspend, it might increase your debt.
Create a detailed itinerary of the places you want to visit and list down the cost. If there are expenses that you are unsure of, overestimate that cost so you don’t blow your budget.
So there you go, five reasons why you overspend. If you are aware of these problems, it’s time to resolve with self-discipline.