How to Stop Overspending

Overspending
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Spending money is a necessary activity, so it can be difficult for people who have a shopping addiction to get their addiction under control since they have to continue buying life's necessities on a regular basis. To make matters worse, compulsive shopping is not recognized as a distinct disorder, although it can be a symptom of other mental health problems, such as bipolar disorder. If you feel that your shopping is way out of control, consider seeing your doctor to rule out a treatable medical condition.

If you feel that you have a shopping addiction, you're not alone. One recent study indicates that 6% of women and 5.5% of men are compulsive shoppers. (The reference for this statistic is https://www.cesisolutions.org/2016/01/the-facts-about-shopping-addiction/) In the meantime, this article can show you how to retool your spending habits and make better financial decisions. If you've tried following these steps and are still struggling, you may want to consider joining a group that offers help. Debtors Anonymous (link to https://debtorsanonymous.org/) offers support groups and various resources for those who struggle to cope with unmanageable debt but can't seem to stop spending.

Cover Your Living Expenses First

It doesn't matter whether you are scraping by on a skimpy paycheck or living a life of luxury. Before you spend on any optional purchases, pay your monthly bills. You know, those tedious yet essential expenses like rent, electricity, and groceries. If there are any non-essentials you take for granted, such as phone, Internet, and travel expenses, pay for them upfront, too.

Food is the trickiest purchase to get right because you need fresh food at least once a week. So stock up on non-perishable foods at the beginning of the month, and set aside an amount you can afford each week to cover fresh fruit, vegetables, and dairy products.

Avoid Getting into Debt

The most common fuel for overshopping is the credit card. It's quick and easy to use, so you can easily make an impulse buy. With the "buy now, pay later" concept, you can drain your bank account for next month as well as this month. So when you head to the shops, take with you only the cash you can comfortablly afford to spend.

Clearing your credit card debt and ditching your credit cards will also help improve your credit rating, which can have an impact on far more than your future access to credit.

Keep Track of Your Spending

Start by making a spending plan, then try to stick to it. If you have a tendency to spend anything left over after covering what is included in your spending plan, at least start to make a mental note — a written note is even better — of what you overspend on. If it is non-essential (such as extra clothing, shoes or other accessories, or electronics), give yourself a limit — how many of each of these you can afford, in terms of money, storage and emotional cost. Keep all of your receipts.

If you find you have overspent on an unnecessary purchase, return what you can. And for anything you just cannot bear to take back, give up its predecessor (if you just have to have those designer shoes you found for $100, donate the scuffed pair to charity). At least you won't be overwhelmed with your own hoarding, and you will be more likely to actually use what you buy.

Don't Be Lured by Discounts

Shopaholics are prone to be tempted by discounts, which seem to offer a way you can have your cake and eat it,too — you may even feel like you are saving money by spending on something with a discount. In reality, you're still going to be out of pocket.

So each time you are tempted by an apparent bargain, ask yourself, "Do I need it?" and "Is it worth full price?" Only if the answer is yes to both should you even consider it.

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Article Sources

  • Benson, A. To Buy or Not to Buy: Why We Overshop and How to Stop. London: Trumpeter. 2008.
  • DeSarbo, W. & Edwards, E. "Typologies of compulsive buying behavior: A constrained clusters regression approach." Journal of Consumer Psychology, 5:231-262. 2008.