Are you confident about your spending habits? You may be surprised once you track your expenses and see how much you are actually spending. Innocent self-rewards can turn into uncontrollable buying urges if you keep missing the signs. And here’s the kicker: while some people can poke fun about overspending and shopaholics, the behaviour can post severe problems if you do not keep your finances in check. Don’t wait for your finances to sink. Keep on reading to know if your spending habits are still healthy or will soon wreak havoc.
Your Wardrobe Need More Space

The compulsive buying behaviour is not only seen in women. In fact, men are perceived to be spending £1,000 on fashion each year. The most common sign of overspending is a closet brimming with clothes, shoes, and accessories but you still think that you have nothing to wear.

You are Constantly on “Survival Mode”

Ever wonder why you usually feel like you are in a “financial survival mode” days before your payday? Did you get a pay raise but you still fail to balance your finances? Perhaps you enjoy treating yourself to fancy restaurants or fashionable clothes every payday but ends up penniless before the next paycheck. Rewarding yourself can be a good motivation to work harder, but you need to know how to prioritise your needs over wants.

You Keep Putting Off Your Bills

According to Life & Debt author Leslie H. Tayne, people who continuously borrow money from relatives to pay their bills are financially strapped. Overspenders usually can only afford to make minimum payments every month after splurging on their wants. What many do not realise is they are losing more money when they choose to put off their bills paid. The remaining balance incurs late payment charges. Worse, unpaid credit card bills and loans can also hurt your credit score in the long run.

Your Salary is Just Enough to Pay Off Your Debts

Deduct your overall due debt from your monthly income. A negative figure means you are living way beyond your means. When you go shopping like there is no tomorrow, you will end up borrowing money to make ends meets until your next payday. When payday comes, you have to use up your salary to pay up your debt. Acquiring debt, paying on payday, and then purchasing new mortgages to can be a depressing cycle to live in.

Credit Cards Are Vital to Your Survival

If you have no choice but to pay with credit card, then you are probably overspending. If you make shopping as a hobby, you may use up your salary and forget the bills waiting for you at home. There is nothing wrong with going cashless through credit card, but everything can go wrong if you shop way more than you can earn. Even if you are using your credit card, you have to buy only the things you can realistically afford to pay in cash.

Maxed Out Credit Cards

Maxing out one credit card is one thing, but maxing out two and more spells financial disaster. Large purchases can eat up your credit utilisation ratio and pull down your credit score. In fact, it is advisable to use no more than 30% of your credit limit to keep your credit score healthy. Marketing professor Carey More wedge shared that the high credit limit makes purchases appear small. A five dollar coffee each day does not seem to hurt when your credit limit is $5,000. But it will all add up to a staggering bill.

You Secretly Feel Ashamed of Your Spending Habit

Spending is fun, but debt isn’t. Financial repression can occur when you feel hopeless about your overspending. Unfortunately, many will not share their financial troubles with their family. They will try to hide it and even avoid getting professional help. Almost 22% of people in the UK will not share their debt secrets to their family and partners. They hide it out of embarrassment until the debt blows up and affect all of their lives.

Your Shopping Habits Interfere With Your Life Plans

Eventually, uncontrolled shopping urges can interfere with your long-term life goals such as buying a house or a brand new car. There may be the willingness to save up, but your shopping urges gets the better of it that you end up spending the money you have intended to save up. You might think that it is just a small part of your savings that you are using now, but continually doing so means robbing your future self a better financial status.

Paying for Unused Services

Overspending does not only applies to material purchases. When you pay for a service you leave unused, you are overspending. One of the most common unused services is a gym membership, TV streaming, music streaming, magazine, and hobby subscriptions. In fact, 50% of the 2,213 adults in the UK admitted that they rarely visit the gym though they have already paid the membership.

You Feel a Rush of Euphoria When Shopping

You shop to feel better about yourself. Buying a new dress or outfit provides an immediate self-confidence boost and a brief "high". This is why it is hard for shopaholics to stop the shopping urges. This is why overspenders are encouraged to wait 24 hours before making a purchase. If you think that you need to buy something, wait for 24 hours to see if the urge subsides. Add to that, you can find other fulfilling hobbies to take your mind away from shopping.

Final Thoughts

It is vital to regularly evaluate your spending behaviour to avoid getting tangled with financial dilemmas. Not only will overspending take away your cash now, but it can also cause consequences you would bear for years to come.

And though many consider overspending habit as something to be ashamed of, getting support from loved ones and trusted friends can help you break out of its chains.

Author Bio

Kelly Wilson is an experienced and skilled Business Consultant and Financial advisor in the USA. She helps clients both personal and professional in long-term wealth building plans. During her spare time, she loves to write on Business, Finance, Marketing, Social Media. She loves to share her knowledge and Experts tips with her readers.