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Five Reasons We Overspend (and How to Overcome Them)

What makes us overspend? Let’s look at five common reasons and how we can overcome them. 

1. To keep up with the Joneses
When people who seem to be in the same financial bracket as us can afford another pair of designer shoes for each outfit, we should be able to afford them, too, right?

Break the cycle: Learn to ignore how your friends and/or peers choose to spend their money and develop a self-image that is independent of material possessions. Let the Joneses keep up with you!

2. We don’t have a budget
When all of our spending is just a guessing game, it’s a challenge not to overspend.

Break the cycle: Create and stick to a monthly budget that covers all of your needs and some of your wants.

3. To get a high
Research shows that shopping and spending money releases feel-good dopamine in the brain, just like recreational drugs.

Break the cycle: There’s nothing wrong with spending money to feel good, so long as you don’t go overboard. Try putting some “just for fun” money into your budget so you can make that feel-good purchase when you need to do so without letting it put you into debt.

4. Misuse of credit
Credit cards offer us incredible convenience, but they also offer us a gateway into deep debtResearch shows that consumers spend up to 18% more when they pay with plastic over cash.

Break the cycle: When shopping in places you overspend, use cash so you’re forced to stick to your budget. You can also use a debit card with a careful budget so you know how much you can responsibly spend.

5. Lack of self-discipline
Sometimes, we just simply lack the discipline not to exchange immediate gratification for long-term benefit.

Break the cycle: Define your long-term financial goals. Create a plan for reaching them through small and measurable steps. Before giving in to an indulgence you can’t really afford, remind yourself of your long-term goals and how much longer your timeframe will need to be if you spend this money now.

Need help to budget and pay down debt? Consider speaking with our on-staff financial counselor. Their financial services are free to members and confidential. Call today at 330-364-8874.

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