A lot of people ask themselves how in the world they are spending too much but can’t seem the figure out how it’s happening. This post was created to describe 8 of the common signs of overspending that many people tend to ignore and/or overlook.
How can you tell if you’re spending too much? The reality is that sometimes it’s hard to determine if you are spending more than what you should be. Some people aren’t able to do just that because they are in denial to the fact that they go overboard and some just don’t know what missteps they are doing.
8 Signs You Are Spending Too Much
Use the information below to help you shed light in determining if you truly are overspending.
1. Wasting food
How do you know when you’re spending too much on food? The answer is simple and it’s called spoilage.
In general, it’s never bad to spend a little more on food. After all, food is a necessity and you consume it. But sometimes, food spending can tell you more about yourself and your overspending habits.
If you happen to buy a lot of foods and you end up having spoiled foods, then, that means you’re overspending in that category. Food is a necessity but it doesn’t mean that it’s financially wise to splurge more on foods when some foods will go bad.
2. Paying the minimum
It may be nice to know that you are able to buy the clothes you want, the new gadgets you desire, among others. If you use your own money, then technically, that’s just spending what you have. However, if you are using credit cards and not paying the whole charged amounts, then, you are overspending for two reasons.
First, you are spending the money that is not really yours. Second, you are paying interests on the outstanding balances and those interests will continue to exist until you fully pay off those charges.
If you tend to buy things and, turn around, only pay the minimum amount or a little over, then, that means that you are overspending. Paying only the minimum means that your interest charges are adding up and your debt is increasing by the day.
3. Seeing tag prices
You look at your closet and found yourself looking at all the new clothes you bought that haven’t been used. If you find yourself in this situation, then, that means you are overspending. Do not buy clothes and other products just because they are on deep discounts and that you may find a need to use them in the future.
The unfortunate thing about the reason of “I’ll find a use for that in the future” is that you are just trying to justify your purchase even when such justification is baseless and senseless.
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4. Keeping up with others
One of the signs that you’re spending too much is when you’re keeping up with others. Always remember that your needs may be totally different from the needs of other people or the majority. Don’t just buy things that other people buy because this is a signal of overspending. Always go back to the basic question of what really your need is.
If you find yourself keeping up with others and justifying that you need them because others have them, then, your reasoning is weak at best. This is one the fastest ways to get into debt, which if left unchecked and solved will lead to financial difficulty.
5. Relying on debt
This goes along with #2. If having income is not enough to meet your daily needs and some wants and you are using debts (i.e. loans and credit cards), then, you are way overspending. This scenario is the simplest definition of overspending. According to CreditCards.com, the average credit card debt is $5,540 per US adult and is $7,494 per card that carries a balance.
You can never go wrong with living within your means. It’s good because you know that when emergency situations get into the picture, then, you know you have money to use. Relying on debt will just makes matter worse because you are using funds that are really not yours and that you will need to pay them one way or the other.
6. Buying more than what you need
Just because a product is on a discount shouldn’t mean that you need to buy more of that. If this is a need and you use it constantly, then, stacking up is a good way to go. But if you buy more than what you need, then, it means that you are overspending. Some people just think that because something is on sale, then, they need to buy more.
The reality is, if the product is on sale, there’s a high possibility that the product will go on sale again in the future. The key takeaway here is to buy what you only need.
7. Not paying bills
Necessities almost always need to come ahead of leisure and entertainment. I don’t know of anybody who doesn’t have necessities, leisure, and entertainment mixed together. If you see yourself with unpaid bills and still manage to have some sort of leisure and entertainment, then, it is best to divert your resources to meet your needs.
If you still find yourself with unpaid bills even when all your resources have been diverted to addressing your needs, you may need to make payment arrangements and/or get a second job to resolve the issue.
8. Not knowing where the money is going
If you happen to find yourself asking about where your money is going, then, your quick answer should “the money is going somewhere and that you need to find out where”. Many times, those who ask this question tend to ignore or deny their spending behavior. Because they ignore or deny such behavior issue, they tend to continue what they do.
If you are in this situation, it is in your best interest to sit down and take control of the situation or else you will keep on spending too much money again and again. Have a plan or a budget and list all the income and expenses you have. By proactively doing this, you know where the money is going and where you need to make (drastic) adjustments.
Sometimes, the reasons that people overspend cannot be easily pinpointed and some reasons are just too obvious. The best thing to do is to stop and assess the situation. It’s never bad to look at your spending habits and patterns because those will tell you where and if you are going over what you can afford. Remember any financial missteps, even small, when left unchecked and corrected can damage your life and future.
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