With 80% of Americans in debt, living beyond our means seems to be a national sport.
But how does this impact our long-term financial security? And what happens when we can no longer catch up?
Many of us end up ordering fast food or overspending on cars and clothing, which gives us temporary joy but can lead to long-term consequences.
In this short article, we’ll take a look at the 3 reasons why people overspend and how it’s often linked to our emotions and self-esteem.
Many of us fall into the trap of trying to be like everyone else, or better if possible. That means a better car and a better house, and it may also mean getting a loan.
But in many cases, this behavior is linked to not feeling valuable enough unless you possess certain things, as if your worth is directly correlated with how much you own.
This behavior can easily destroy your life if you don’t find other ways to look at yourself in a favorable light, because there’s no end to how much deep insecurities can make us spend.
The truth is that looking at our bank statements each month and maintaining a budget can be a daily reminder that we aren’t that well-off.
In many cases, however, this can be the opposite. We may not let ourselves spend that much, and in the long-term, we’ll have more financial security than someone who is chasing instant gratification.
You have to keep in mind that most people feel the same as you do when looking at bank statements. It’s far easier to ignore it, but enduring the pain of acknowledging that you need to make some budget cuts will save you a lot of hassle later in life.
3. We feel that we need to reward ourselves after doing great work
Most of us work hard for the money we make, and, yes, we do deserve a treat once in a while. But if you work hard every month, does that mean that you have to treat yourself each month as well?
This behavior can easily snowball into overspending on expensive clothing, meals, and electronics as a way to make yourself feel better for working hard. The trick is to find ways to reward yourself that cost less or are free.
Do you love exquisite meals? Learn to cook them yourself.
Are you a voracious reader? Go to the library instead of taking trips to the bookstore.
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If you want to find out more about what triggers overspending and how you can control it, feel free to contact us with your questions.