If you’re having trouble sticking within your monthly budget, there are likely some relatively simple reasons for that. Identifying the factors behind your overspending is a key step in regaining your financial health. We’re here to help. Here are some common reasons people overspend, and how to sidestep them.
Reason #1: Ignorance is Bliss
Many people simply do not track expenses, and thus — surprise, surprise — end up spending more than they can afford. Some people do track their expenses, but in a haphazard way. Neither method will do you any favors.
Try this exercise to see if you’re truly on target with expenses: Jot down the price of gas, a gallon of milk and the last shirt you purchased. Now go and check those actual prices. Are you close? If not, you’re ignoring the details and that can lead to overspending. If you’re not tracking expenses, start now. Create a budget and be as detailed as possible. If you pay attention to (as they say on TV) the actual retail price, you’ll be able to stay on course.
Reason #2: Easy Does It
As US News reports, credit cards and digital wallets like Apple Pay and Venmo have made buying things extremely easy. Too easy. The problem is that convenience comes with a price. The more seamless the purchase, the more likely you are to not even think of it.
To curb the habit of overspending because it’s become too easy, try deleting your credit card info from your computer and phone. Remove any saved payment info from retail sites. Doing this will require you to input your payment info every time you want to buy something. That will give you the chance to think once or twice before going through with the process.
Reason #3: Forgetting the Future
Impulse purchases can derail any budget. Instead of thinking of the big picture, you get caught up on small distractions. Next thing you know, you’ve busted your budget once again.
One way to avoid impulse buys is to keep reminding yourself of your big goals. Put a picture of that car you’re saving to buy as the photo on your phone’s lock screen. Use apps to send you a message about college savings accounts to stay focused. You’re less likely to make rash financial decisions when you have the future on your mind.