Tuesday, March 28, 2017

19 Underlying Causes of Overspending

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When it comes to overspending, men and women are both are guilty of doing it. According to many different conducted research studies, more than fifteen million Americans are guilty of compulsive spending and shopping. Financial matters are the primary cause of stress and breakups within a relationship. Many American individuals have accrued more than $10,000 in debt due to overspending. Read on for more information regarding impulse buying and overspending.

1. Buying Happiness

A lot of people find themselves in debt or overspending when they are trying to buy happiness. Sometimes people use money to keep their mate happy or they use money to make themselves happy. This form of retail therapy works for a little while, but soon ends, and the money that is spent adds up.

2. Access to Credit

Many people have easy access to credit, such as credit cards. Your credit does not have to be perfect in order to have a line of credit given to you. Many credit card companies can't wait to send you a credit card with a line of credit for overspending purposes. When you use their line of credit, you not only have to repay the amount you spend, you have to pay interest which means more money for the company. One missed payment can mean a lot of debt in the future.

3. Instant Gratification

Some people overspend for instant gratification purposes. You may know exactly how much money you have and how much money you can afford to spend, but something may catch your eye. Instead of waiting, until you can afford the item, you purchase it and possibly put yourself in debt because of overspending. Instant gratification is a common cause of overspending. A lot of people do not have the patience to wait until their next paycheck or the next time they get paid to purchase an item they want.

4. Guilt

Guilt is another reason people overspend. Instead of apologizing to a person for something they have done wrong, some people believe that everything can be corrected by shopping and spending money. A lot of people believe expensive gifts are a way to cover up their mistakes or wrong-doings, which is certainly one of the best ways to overspend quickly.

5. Access to Cash

Most people have easy access to cash, whether it be a steady and stable job or another source of income. When you have money available to you, sometimes you can't help but spend it. A lot of people do this. Having cash in your hand is very different from swiping a card. When you have cash in hand, you may feel invincible, like the world is in your hands, but this is far from the truth, especially when the money runs out.

6. Temptation

Temptation is another cause of overspending. Most retail stores have many different strategies to get you to give in to your temptations. For example, the candy, drinks and chips that are located at the front of the store in the check-out line. Those items are placed specifically to get you to spend a few more dollars before you leave the store. Stores also place toys and other things children may like in the check-out line to entice children to ask their parents for more things from the store on their way out. This is where a lot of parents give in to their child's temptation and purchase the item their child wants, and in turn, overspends.

7. Avoidance/Secrecy

Some people do not want to overspend, but they choose to because they don’t want to tell their friends and family they don’t have enough money to go out or pay for their meals. No one wants to be the odd ball or the person who cannot afford to have fun. Instead of declining the invitation, a person may decide to attend the events to fit in. Having a sense of belonging is a stronger feeling than many people realize, and they often give in to it. No one wants to be viewed as the poor person or failure of the family or group.

8. Buying Love

Some people believe they can buy love. This action is commonly seen in relationships when one party of the relationship is materialistic. You may want to be with someone and feel the only way you can keep them is by spending money on them. Not only will you find yourself in debt quickly, you will realize that a relationship is not one that should be based on money. Valentine's Day is the famous holiday for overspending when relationships are involved.

9. Sense of Power

For a lot of people, money means power. As long as you have money, you are in complete control, or so many people think. With having money comes spending money. A sense of power is stronger than many people realize. This sense of power can cause you to spend ample amounts of money in a short amount of time, which will lead to overspending and debt in the future.

10. Lifestyle Maintenance

Sometimes people's lifestyle changes for various reasons. In this situation, some people may not be able to live up to their previous means or live above their means the way they want or were able to, and this is the perfect recipe for overspending. People do not realize how expensive it is to maintain a particular lifestyle. Living lavishly is more than purchasing expensive items from time to time. This type of lifestyle must be maintained. Expensive clothes, houses, vehicles, and other items cost more to maintain than it costs to purchase them.

11. Keeping Up Appearances

A lot of people choose to overspend because they are trying to keep up appearances or keep up with others who live an expensive lifestyle. Even though you may not have enough money to keep up with the latest trend in technology, fashion and other categories, you will decide to overspend just to say you own a particular item. This is one of the easiest ways to overspend.

12. Poor Upbringing

If you have had a childhood where you grew up poor or less fortunate than many others, this causes you to become a prime target for overspending when you become of age and begin to make your own money. Individuals who have had a poor upbringing have an intense sense of not only instant gratification, but the feeling as if someone will take your money from you or it will somehow disappear if you don’t spend it all at once or spend as much of the money as you can at one time.

13. Impulse Buying

Impulsive buying is the primary reason for overspending. Before you go to the store, you take your time and make a list to make sure you do not give in to impulse buying, but a lot of the time, you end up giving in and spending more money than you planned. Impulsive buying happens to the best of us. When something catches our eye, we go into "buy mode". This mode makes us believe that we cannot wait until a later time to purchase an item and it has to be purchased immediately.

14. No Budget

Budgeting is more important than a lot of people would like to believe. When you have a set budget, a lot of things will fall into place, and many financial issues, such as overspending, will not be a problem. When you create a budget, it needs to be as reasonable as possible. It is best to create a budget using your bills, including household and other expenses, such as gas for your vehicle and other things you may need during the week or month. Without a reasonable budget, there is a good chance you don't keep track of the money you spend on a daily basis. You may think $10 or $20 every day or every other day is not a lot, but when you add everything up, you could easily spend $30 to $60 every week which is $120 to $240 extra each month. When you budget correctly, you can decrease the amount of money you spend and stay within your budget to avoid financial mishaps.

15. Misinformed about Debt

You may not know as much about overspending and debt as you think you do. If you have a credit card, it should only be used for emergency purposes. Maxing out your credit card on shopping sprees and fast food, especially when you do not have the means to repay the money you spent with interest is not a smart financial decision. Many people view credit cards as a form of financial freedom to purchase everything they ever wanted, but this is where a lot of confusion occurs.

16. Laziness

Surprisingly, being lazy can lead to overspending. Instead of cooking, you may get fast food on the way home from work or have a pizza delivered. When you are tired, you may not feel like doing much which causes you to take short cuts, such as ordering fast food or purchasing a new outfit instead of washing the clothes you have.

17. Credit vs Money

Credit and money are two very different means of financial stability. Credit can be worse than having cash because of technology. When you only have cash, you are forced to travel to stores and purchase items, whereas with a credit card, you can purchase just about anything you desire from the comfort of your home. A lot fewer people are willing to go to the store to spend the cash they have. With a credit card, all you need is the credit card number, expiration date and the security code on the back, and you can purchase just about anything you desire.

18. Self-Worth

A lot of people base their self-worth on the amount of money they have. Having a lot of money does not determine who or what you are, but for some people, money is their entire world. Without money, you may feel worthless and useless. Self-worth can be based on many different things, but for some, money is the only thing a person can focus on. In the long run, trying to prove your self- worth to yourself or others can cause you to become a victim of overspending and can lead to a large amount of debt.

19. Entitlement

You, like many people, may fail to realize that credit is a privilege and not a right. A decent credit score will get you a line of credit. Not qualifies for a credit card. Sometimes people base what they think they deserve on the things that other people have. A relative or friend may be wealthy or able to live comfortabley, so you may think you are entitled to the same lifestyle. If you do not have the means to imitate the lifestyle you want, overspending will quickly become an issue.

Here are many different ways that overspending can easily become a problem. Overspending is more common than many people think and easier to achieve. The good news is overspending is something that can be corrected. Two things you can do to control your overspending is to create a flexible, reasonable budget and stick to it, and limit the amount of money you spend. Learn to distinguish between your necessities and your wants. In your budget, you can set money aside to purchase random items. You can control your overspending and live comfortably without feeling like you have to live from paycheck to paycheck or that you can never have any fun or adventure. Being financially responsible seems like a drag, but once you become accustomed to budgeting and understanding your spending habits, you will be able to adjust accordingly.

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