13 SIGNS OF OVERSPENDING
Discover tell-tale signs that you might be overspending and find out what to do about it.
July 25th, 2018
By: Northern Credit Union
1. MINIMUM PAYMENTS - If you can only afford the minimum payment on your credit cards, it's one of the clearest signs that you're overspending. Minimum payments just keep your debt at bay but do little to pay it down.
2. UNPAID BILLS - If your bills are piling up or you're often late paying your bills, you might want to think twice about buying that fur coat.
3. THINGS YOU DON'T USE - Do you have a lot of recent purchases around the house that you have barely used? Maybe some clothes with the tags still on them or an appliance that just went straight into the cupboard?
4. FEAR OF REJECTION - Another sure-fire sign that you might be overspending is if you worry that your credit card might be rejected when paying. If you're even close to your limit, it probably isn't the time to 'treat yourself.'
5. KEEPING UP WITH THE JONESES - There's a certain amount of pressure to keep up with the lifestyle of others, but if you can't afford it, resist the urge.
6. CREDIT CARD ONLY - If you have no option but to pay by credit card, you are probably overspending. Consider building up some savings before you indulge in another shopping spree.
7. SHOPPING HOBBYIST - If you consider shopping a hobby, you probably spend too much. Fishing, hiking, painting, billiards-those are hobbies. Shopping, not so much. At least, if you want to hold onto your money.
8. RETAIL THERAPY - Beware of shopping just to make yourself feel better. It's a fleeting pleasure that can be extremely expensive. Better to work on the problem than end up with another problem.
9. RAIDING RETIREMENT SAVINGS - Never dip into your retirement savings just so you can go shopping. A dire emergency or retirement itself should be the only excuses for taking money out of your retirement fund.
10. SOLID INCOME BUT NO SAVINGS - You may be living beyond your means if you have a good job and a solid income but find yourself unable to build up any savings. It might be time to scale back the spending a bit.
11. BEWARE OF BUMPS IN THE ROAD - If a financial emergency or job loss would send you tail-spinning into debt, you might want to stop spending and start saving for an emergency 'rainy day' fund.
12. YOU LIE OR KEEP SECRETS - Hiding your shopping habit or lying about buying things is definitely a warning signal. It likely means that you're subconsciously ashamed of the amount you're spending.
13. INCOME TO CREDIT CARD DEBT - It's an easy, measurable indicator: if your monthly income is lower than your credit card debt, it's time to reign in the shopping and start paying down your debt.
If you've recognized a few of these indicators in your own life, it's time to make a few changes:
- First, try to recognize the reasons for your overspending and change your behavior. You may be spending because it makes you feel better for a brief moment, or your lifestyle is bigger than your budget. Figure out what's motivating your overspending then try to address it in a healthier way.
- Next, try to stick with cash instead of credit cards. Go to an ATM and take out what you're comfortable with spending for the week and don't stray from it. This will help keep you within your means and on budget.
- Finally, start paying down your debts and start an emergency fund. You can look into consolidating your debts at a lower interest rate. And once your debts are paid off, saving for a rainy day can provide some much-needed stability.