Money is a difficult subject to talk about; however, when you are spending too much money it becomes important to tackle the situation. No matter what you hear when people tell you that money isn’t the end of the world, well, in fact, there are not many places that you can live where you don’t need money to buy items that you need. It is a fact of life and an important one; I understand the need to have money to live, to buy the things that you need, but sometimes spending money takes on more than this, it becomes a release and we can spend more money than we have coming into the home.
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Why You Are Spending Too Much Money
Money doesn’t make a person happy, but it is a necessity to feed, clothe and to pay for shelter for people all over the world. Some people are better off, but also, there is an increasing need to spend more money than you earn, to pay for items on credit, with the hope to boost the economy, create jobs and raising the standard of living of everyone.
However, it isn’t about creating jobs, it is about the debt that we are creating that is scary. Using credit to buy the goods you want instead of saving up to buy the items is becoming the normal, however, this means that you are paying more for your goods as interest’s added onto the payment.
It is easy to spend more money than you have, credit companies seem to throw credit options at anyone and everyone and this isn’t always the way forward.
You shouldn’t be constantly looking for more credit to pay off your current debt, you should look for ways to pay off the credit and become debt free. Swapping credit between companies isn’t always a great idea, you could end up paying more back than you could imagine, it is quite scary when you add up the amount that you pay back purely on the interest of a credit card.
Understanding the problem as to why you are spending too much money is important, it might be as simple as you don’t know how much you have coming into the home and the expenses you have going out. The easiest solution to this is to create a budget, this isn’t as scary as it sounds and it can help identify the areas you need to work on to reduce your spending.
Three Signs You Are Spending Too Much Money
Three signs that you can use as an indicator that you are spending too much money, are:
- If you can recite your credit card number, the expiry date and the security code on the back of the card without looking, this can indicate you might be using the card too frequently to purchase goods and services. This is a warning sign that you might need to reduce the times you are charging goods to your credit card. The internet plays an important part in today’s society, you can spend money without paying too much attention to the products you are buying and the amount each item costs.
- If you can walk into your favourite shop and the staff fight over who is going to serve you because they know you are a big spender, they might even know your name. All these are warning signs that you might need to adjust your spending habits and perhaps the best places to shop!
- If your purse or wallet is full of receipts and you empty these into the bin without checking the value or entering the amount on your accounts. A clear sign that your budget is wavering and you could be in denial as to the amount you are spending.
Spending too much money can mean that you are not taking control of your finances and you are letting your desires of spending money to take control. This can cause many problems including going into debt; debt will cost you more money in the long-term because you will need to pay interest on the money borrowed, increasing the cost of an item.
If you notice that you might be spending more money than you want to, it is never too late to look at your finances to see if you might need to change your spending habits in order to put you back on track with your monthly budget.
Creating a budget is not about restriction, or not allowing you to spend money, but to restrict the amount of money you spend and to bring it into line with the money that you have available. Spending more money than what you have coming into your household will lead to financial problems and stress.
A great book that will help you with budgeting is by the author Dave Ramsey, he has lots of practical advice.
This isn’t good for your health; setting a budget and working out what you can afford to spend will allow you to move forward. Try living a debt free lifestyle, this gives you the freedom to buy only what you can afford and to save for the bigger purchases that you need and want.
Therefore, whilst it might seem like a restriction to create a budget when you are spending too much money, in truth you are giving yourself the freedom to spend the spare money on the things that you want and need and not giving the credit companies your hard-earned cash! It is about finding the balance in life with the money you have and the items you want and need.