10 Spending Habits That Hinders You From Saving

People who overspend share a few common traits which can be easy to change once they are made aware of them. When people find out where they’re going wrong in their spending, it’s easier for them to set up a plan to counteract their overspending habit and get their finances back on track. 

Here are ten of the most common reasons we have found about how people blow the weekly budget and dig themselves further into debt.

1. Keeping Up Appearances

When people notice their friends and family enjoying the latest comforts of life, they want in as well. Social media has lit a fire under this phenomenon, as people browse their feed and notice post after post of their friends living the high-life. It’s only natural to want to enjoy the same things, which can often lead to them making purchases they can’t afford.

2. Credit Cards are Too Convenient

Taking real cash out of their purses and wallets makes people intimately aware of how much the latest purchase is costing them. When they use credit cards, it’s almost like pretend money, and the minimum monthly payment is easy to cover – but it soon all adds up.

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Credit Cards are Too Convenient

Purchasing on credit cards also means the item will cost a lot more than the ticket price when you add in the interest and credit card fees. Debit cards come with all the purchasing convenience of credit cards but without the fees and interest charges. Debit cards also make the purchase ‘more real,’ which will make you think twice about spending.  

3.  Special Occasions 

Birthdays and Christmas, we all know they’re coming, but before it we know the niece’s birthday is tomorrow or Christmas is just around the corner, so out come the credit cards.

Special occasions and Christmas presents can be crippling to the household finances when they’re not factored into the weekly budget. But true to the Christmas spirit, it is not Christmas without a quick dash to the stores to buy gifts. That is why it is important to plan and create a budget for that special holiday.

4. Weekend Shopping and Retail Therapy

Meandering around the shopping centre partaking of a little retail therapy can be a nice day out, but if people aren’t careful, they can end up spending more money than they can afford.

We completely understand – the display windows full of ticketed items offering 75% off today only are very tempting – but does anyone need another set of scented candles or the tenth pair of shoes. We all need a day out, but a refreshing walk in the park will be a lot healthier on the finances.

5. Instant Gratification

People often sacrifice their long-term prosperity by springing for short-term gratification. For instance, some people love to travel and have no trouble spending a few thousand every year on extravagant overseas trips, all while neglecting to save a deposit for buying their own home.

6. It’s Only Money, and You Can’t Take It With You

They’re already in the hole for $5,000 on their credit card, so a $100 meal at the fine Italian restaurant uptown is just a drop in the bucket and can’t possibly add to their problems; this is precisely the kind of thinking and spending which got them into trouble in the first place.

7. Justifying a Purchase

People will always feel the need to justify their purchases, such as that fantastic deal on the new iPhone, “it was too good a deal to pass up.”

It’s okay to take advantage of a bargain, but only if it’s for a product you were planning on purchasing anyway.  

8. Impulse Buying

Most people head off to the shops without a plan, which means that impulse buys are the order of the day. Planning your purchases ahead of time will ensure you don’t blow the budget, and will also prevent wastage, which can add up to a few thousand dollars in the bin every year.

9. Not Having a Budget

Many families live from paycheque to paycheque with no real idea about how much is going out versus how much is coming into the household. Without a budget, it can be challenging to keep their spending in check as they fail to account for future expenses such as car servicing, and household maintenance.

Without planning, a broken-down car or a run-down house badly in need of repair can be more than the budget can bear.

10. Emotional Spending

Buying something shiny and new makes people feel good, but the effect is temporary, and another fix is soon needed. After a bad day at the office, spending money can take the edge off, but the extra bill at the end of the month may mean that the budget has well and truly been blown.

Being in debt is unnecessary stress you are adding to your life. If you know that your budget is out of control, you can take steps today to reign in your spending by speaking to a qualified finance professional who can help you consolidate your debts and give you back control of your finances.

Learn how to manage your financial resources; check out our blog about making informed decisions.

By |2018-12-10T23:16:05+00:00December 10th, 2018|Financial Literacy, Save money|0 Comments

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