If you’re anything like me, you can relate to the power of justifying overspending money.
How many ways can you rationalize in your mind why it’s ok to overspend even when your wallet and bank account says otherwise? In my quest to get out of debt and build wealth, I’ve had to face some tough challenges when it comes to my money. It would do me absolutely no good just trying to change my spending behavior without digging into why I was overspending.
I came up with 4 simple reasons on how I justified my overspending pattern. Right or wrong, these are the things that have influenced my thinking and my overspending.
- I work hard and I deserve it: I work hard for the money and should be able to spend it however I like. You only live once, so why not- right?
- There’s no plan. There’s a high chance of overspending when I don’t have a plan in place on where my money should be going. A budget is always a great place to start for me. Without it, I’m prone to just spend now and try to figure it out later.
- Not organized. Another way to get me to overspend is to be disorganized! Having a plan and being organized really go together here. If I don’t have a plan and don’t know where my money is going (disorganized), please believe I will most likely overspend. Spend Now, Figure it Out Later.
- Too good of a deal to pass up!! Deals, discounts, and sales. How can you voluntarily walk away from a deal of a “lifetime”? My thought is, I may not need it now…but I’m sure I’ll need it soon enough!
- Outside Pressure. Whether you or I like it or not, we are influenced to some degree by the outside “forces”! I mean really, just look at how creative and influential advertisers are now. From magazines, bill boards and internet advertising, to a simple conversation on the “latest and greatest” new smart phone, it’s almost inevitable for any of us to be impacted by the outside. Now, there are some things I come across that doesn’t bother me so much, but when the friends want to go out to eat or have happy hour, 8 times out of 10 I’m in!!
Listing my justifications for overspending was just Step 1 of my money management journey. The next thing needed was to list realistic ways to change my behavior.
I came up with 5 easy, breezy ways to curb my overspending trend.
- Get Organized! First things first, I needed to get my finances in order. Before I could even come up with a realistic plan, I had to see where my money was actually going. I gathered all of my statements for 3 months and categorized each expense. I saw where I was clearly overspending and where I could improve on.
- Come up with a plan for my money. In simple terms I needed a realistic budget. The key word is realistic meaning my budget had to reflect my actual monthly spending. I took the information I pulled from Step 1 and came up with a plan on how I was going to spend my hard-earned dollars.
- Have a bigger goal than increasing my shoe collection. The whole point of this exercise comes down to 1 simple thing: I want to get completely out of debt! Getting out of debt (student loans!) is where my focus is, and yes, it is bigger than adding to my shoe collection. Seeing where my money is going helps me adjust my spending behavior, which in turn, allows me to increase my principal payment on my student loan debt. Without a plan, without a goal, there’s really no financial hope.
- Learning the word “no”…and saying it once or twice a day. The word “no” became very significant for me as I challenged the outside pressures of advertising and enticing suggestions of happy hours! A quick “no, thanks” really has helped me and my bank account as I sidestepped the pressure to spend outside of my budget. Please note: saying “no” really isn’t always easy…but it gets easier over time, especially once you see how much money you are saving. Try it.
- Giving myself some slack. You’re bound to have some slip ups…hey, no one is perfect! I learned not to get caught up in my financial mistakes but learn and grow from them. I’ve also put entertainment and fun items in my budget plan. When you’re too rigid with the numbers you have a higher probability to say “screw it” and forget the entire plan. If you give yourself some slack from the beginning, you’re likely to be more successful.
I only touched just a small surface of why we justify overspending. If I asked 20 people one reason why they overspend I would get 20 different answers. If you notice money management really is mostly a behavior thing, not much intellect or book knowledge needed. If you can get yourself under control, I guarantee you will see a huge difference (for the better!) in your finances.
I’ve listed my overspending reasons, but I’m really interested to hear from some of you! Why do you overspend and what are some of your best methods you’ve used to curb your spending trend?