5 Situations Where People Spend Too Much
Money comes with emotional baggage.
the main points
- Money is associated with a lot of our formative experiences.
- It’s easy to get caught up in spending on special occasions or vacations.
- Watch out for overspending on big sales and on vacation too.
For a lot of people, myself included, money management is about emotions. If you think about it, it makes a lot of sense. Money is part of many of our formative experiences. Think back to being a kid and making cash for your birthday and feeling rich (I’ve never felt so rich as when I turned 10 with $40 cash in my hand; I gotta spend it on cassette tapes at the mall). Or remember watching your parents pay the bills (and for a lot of people, seeing them stress out about how to find the money for those bills).
Once you become an adult, you are in charge of your own money in most cases, and this can be a scary situation. There are plenty of opportunities to make bad decisions with your money, like buying a home For the wrong reasons. Or you could end up in debt and have to find a file way out of it. Life is full of potential financial pitfalls. Here are some everyday events where you might find yourself spending a lot of money.
1. You are feeling emotional
Have you ever heard the phrase “retail therapy”? This is when you go shopping for the express purpose of making yourself feel better. A survey found that 62% of shoppers bought something they would cheer themselves up, reports WebMD. This can be a very dangerous game indeed, especially if you have a weakness for online shopping. It used to be that you had to physically leave your house to indulge your shopping itch, but now all you need is a device with internet access and Credit card. By the way, you don’t have to feel bad for doing this; Sometimes you may be happy and want to buy a gift for celebration.
2. You have to buy a gift
Speaking of happy occasions, it’s very easy to overspend if you’re buying a gift—especially if it’s for someone you love and want to make them happy. I once spent a few hundred dollars that I couldn’t afford (I was a grad student then) to buy my dad a dart set for Father’s Day. It may have been 15 years ago, but I still remember that, as well as the blow that hit me current account. (By the way, he loved it.) Remember that for the people you love, it is often your presence that makes them happiest, not your gifts.
It’s so easy to throw all of your caution (as well as your shopping list) to the wind when you’re in the midst of a big sale. For events like Black Friday or Amazon Prime Day, it can be helpful to make a plan in advance — even if part of the plan is allocating yourself a certain amount of money (say, $50 to $100) that allows you to spend without greater justification.
4. You celebrate the holidays
Many people have gone through the cycle of taking the holidays, and I hope for you it’s not just that Season of excessive spending. The holidays are another time when we forget that the important thing is spending time with the people we love, rather than going into debt to buy them just the perfect gift.
5. You’re on vacation
Sometimes vacations don’t feel like real life. You’re away from home, you see beautiful scenery and you eat at fun new restaurants, so you may end up feeling as if the money you spend doesn’t matter. And after all, spending on experiences makes us happier than just buying items, according to 2020 research from the McCombs School of Business at the University of Austin. Be wary of overspending on vacations, because like memories, credit card debt can linger for a very long time.
How can you better manage your spending?
If you’re struggling with your spending habits, I sympathize. It’s never quite as simple as “stop spending so much money,” is it? Fortunately, there are a few things you can do to take control of your money:
- Make a budget: It’s not sexy, but having a clear look at your income versus your expenses can really help. If you’re not a fan of spreadsheets, try the Budget application.
- Talk to a specialist: I think it’s great to talk about money with everyone in your life, but I’ve become a big believer especially when talking to a financial professional like financial planner. They have no personal interest in your money, and can make recommendations on spending, saving, and future planning.
- Increase your income: In a very real sense, you can only cut back so far. If you’re living on paycheck even after you’ve taken steps to spend less on fun things, consider increasing your income, if you can. This could be in the form of an increase in work, Side hustleor even getting a new full-time job (or career).
Most of all, don’t stop caring and don’t give up. Every day is an opportunity to get better with money and learn how to overcome your overspending triggers.
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