Spending Too Much? | Farnoosh.tv

Thinking twice about those shoes you purchased over the weekend? You?re not alone. A recent survey finds that most Americans have issues with spending too much ? even the wealthy.

A?poll by the National Foundation for Credit Counseling found that consumers? biggest financial regret was overspending. It trumped common financial insecurities including: inadequate savings, insufficient preparation for retirement and not buying a home.

Overspending is pandemic and not just limited to those of us that struggle without limited?finances. For example, it was reported recently that Philadelphia Eagles quarterback Michael Vick spent?$29 million of the $31 million he?s earned since 2008. He?tweeted earlier this week warning followers to be smart(er) with their money.

Author Don McNay?s book ?Life Lessons From The Lottery? examines cases like Vick?s where Americans have blown through large sums of money and finds the financial lessons in them that we all can use. McNay writes that people who overspend do it for five reasons. First it?s to impress family and friends, either by being overly generous or showing off (e.g. lavish dinners, trips, etc.) Next, it?s because they?ve chosen to receive money from a contract or settlement in a lump sum, in lieu of installments, making the money trickier to manage. McNay also says our impulses urge us to make unhealthy financial choices. There?s also the excuse of bad habits and advisers. Finally, he says, not having a purpose for your money is another surefire way to blow it.

Is there any hope for us? Of course, but only if you?re willing really examine your behavior and choices ? and commit to a few changes.

Here are a few ways to help you spend less:

Identify Patterns

To understand why we spend, it helps to examine how?and when we spend. Look for repetition in mood or timing, as it pertains to ?your spending. Are you an emotional spender? Many of us go on shopping sprees to engage in a little ?retail therapy? when we?re upset. Others of us are social spenders who are typically good with budgeting, but tend to lose control when eating, shopping or travelling with friends. ?There are also impulse shoppers who don?t feel the need to spend money but, when presented with a good sale, simply can?t turn it down. Probably the most common pattern however might be among those of us who shop absentmindedly, often paying too much for items or being simply unaware of how much we?re spending when using a credit or debit card. Visa did a survey a few years back and found Americans ?mystery spend? about $1,000 a year.

Keep Your Checking in Check

Budgeting apps like Mint, MoneyWise and iWallet?can help keep track of your inflow and outflow. While you?re there, attache specific goals to your budget to give your money some purpose. Planning to save for a family vacation may make it easier to resist a new pair of shoes. Your bank may also offer features through online banking that allow you to categorize your spending and set goals.

Carry Cash

It may not be as convenient ? but that?s the point. Go to your bank?s ATM once a week and take out enough money for your weekly spending. Sticking to cash ? instead of plastic ? makes you think twice about each and every purchase. In the end, surveys show we can save up to 20% when adopting a cash diet. Doing so should help to limit any?splurging?and also provide a constant reminder of your?balance.

Photo Courtesy,??stuartpilbrow.

Source: http://www.farnoosh.tv/financial-basics/spending-too-much/

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