Recognizing patterns of overspending can be a difficult problem to diagnose, especially in ourselves. Maybe you spend to satisfy an emotional trigger, to keep up with the Jones’s, or maybe you don’t even realize you’re living beyond your means. Many people spend themselves into financial ruin and don’t realize until they have accumulated piles of consumer debt. Identifying the signs of overspending is crucial to get your spending under control before you accrue serious financial damage.
5 Signs You’re Overspending
- You don’t follow a budget – A budget is a spending blueprint to guide you through the month. Not following a budget is like “free reign” for spending, and can result in unchecked overspending. If you’ve never followed a budget, try this household budgeting worksheet to get started.
- Dipping into savings – Although it may seem harmless now, dipping into your savings can cause devastating long-term impacts. This includes retirement funds, as well! Taking from your future to support yourself now is a bad sign.
- Hitting (or exceeding) your credit limit – Credit scores are partially calculated by your credit usage ratio. Being at or over the limit will have a serious impact on your credit and could lead to denied loans.
- Struggling to make minimum payments – Minimum payments are roughly 2% of the account balance. If you’re struggling to make the minimum monthly payment on your cards, you probably are relying too heavily on credit and have more debt than you can handle.
- Living paycheck to paycheck– If you find you are living paycheck to paycheck or not paying bills on time, you may be on the verge of a disaster. If you have even one financial emergency, this can put you in a serious financial crisis.
Do your spending patterns reflect any of the behaviors on this list? If so, consider making some changes to reign in your spending and get back on financial track.
If you’re struggling to pay off debt, ACCC can help. Schedule a free credit counseling session with us today.