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  • 5 Reasons You’re Spending Too Much Money

    To many of us, the expression “too much month at the end of the money” is both humorous and all too familiar. It’s not funny at all to have a serious financial problem. Although it may not seem significant at first, the fact that you will have to live on rice and beans until your next paycheck arrives because you overspent on gadgets or the newest fashion fad is, in the grand scheme of things, quite serious. Is there a plan for dealing with unexpected crises? When is it time for you to hang up your boots?

    According to the FINRA Investor Education Foundation’s 2016 report on financial competence, around 60% of Americans spend at least as much as they earn. A GoBankingRates poll from that same year also indicated that 70% of Americans have less than $100 stashed up for old age[1]. Most Americans also enter their golden years with substantial amounts of debt rather than retirement savings.

    With statistics like these, you may be ready to start making more responsible money decisions. Here are five reasons you’re spending too much money, and what you can do to change your mindset.

    I can’t wait!

    There’s nothing quite like instant gratification. But indulging in that impulse buy will either blow your budget, lower your cash flow for the month, or put you further in debt. If you save the money to make that purchase in cash instead, you’ll not only find out over time if you still want it, but you’ll also save potentially hundreds of dollars in the interest you would have paid if you bought it with credit.

    It’ll make me feel better.

    “Retail therapy” refers to the practice of going shopping in order to improve one’s state of mind. If you’re feeling blue, take some time for yourself by doing something relaxing, like taking a bath, reading a book while sipping tea, or taking a stroll around the park. 

    In the near future, I will be receiving additional financial support. 

    Our tendency to overestimate future income and underestimate costs is endemic. When saving for retirement, it’s important to keep an eye on projected cost increases so you don’t blow your savings on frivolous items. 

    This is an extremely rare event. 

    We can all agree that special events are a great excuse to splurge a little, but the reality is that these occasions come up more frequently than our wallets can handle. Limit your yearly celebration spending and stick to your monthly budget to save money. You may save a lot of money by making homemade presents and planning ahead.

    I earned it!

    If you just finished a complex project or landed a big client, you might be tempted to overspend to reward yourself. Of course, you earned it, but making responsible financial decisions means you’re making choices not just for your happiness and comfort today, but for decades into the future.

    Are you struggling with finances and need help becoming a better money manager? Call my office today and let’s set up an appointment to talk.


    [1] 2016 GoBankingRates survey (