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Posted on July 6, 2022 at 9:51 AM by Danielle BrownWolf

Inside the psychology of overspending

When you don’t have control over your spending, things can get out of hand quickly. Overspending can impact every part of your life. Studies have shown that overspending can have a negative impact on physical health and close relationships. But perhaps if you know a little bit behind the “why” you overspend, you can start to cut back.

While no person (or their spending) is the same, the psychology behind overspending can be a macro and micro issue. As US News reports, on the macro level, media, advertisements and social pressure can all lead to overspending. Marketing firms go to great lengths to convince you to spend money. They try to persuade you that sales are vital; that items are scarce. Chances are your friends’ social media feeds are filled with posts that make you want to travel, go out to dinner, buy a new phone, etc. On the micro level, you might be overspending to cope with personal stress. Perhaps you never set a budget because you are worried about what your finances really look like — if you don’t face the debt, it’s not there.

Thankfully, you can stop overspending with a little work; emphasis on the “little.” The best way to stop overspending is to start small. Start tracking every expense so you can see where your money is going. Plan your purchases out. Think about what you are buying before you buy it. Create friction in the purchasing process by removing credit cards from your phone and computer. Create long term savings goals. Each step will bring you closer to curbing your spending; ultimately leading to a healthier financial life.

 

This article was originally posted on savvymoney.com 

The material provided on this page is for informational use only and is not intended for financial, tax or investment advice. VisionBank, PurposeBank, and/or its affiliates assume no liability for any loss or damage resulting from one’s reliance on the material provided. Please also note that such material is not updated regularly and that some of the information may not therefore be current. Consult with your own financial professional and tax advisor when making decisions regarding your financial situation.

Categories: Spending

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