I find that one of the reasons women resist starting a budget or some sort of spending plan is because they don't think they will stick to it. The lack of trust in their ability to manage their spending keeps them from starting a budget. As a result, they quit ahead of time. They unconsciously give up on their goals to save for an emergency fund, the kids' college tuition, the next vacation, and even retirement.
These women may think that they cannot stop the cycle of overspending. They believe that it is out of their control and don't see a way out of it. They genuinely find it nearly impossible to cut back on their spending.
So what is overspending? In this article, I'll focus solely on the definition of overspending and the behavior itself.
Overspending means that you are spending more money than you planned to spend. So the truth is that you and only you would know if you are doing it. It really comes down to your priorities. So if you are purposeful about your decision to buy something, and it is intentional and comes from a positive or neutral emotion, this spending behavior is most likely not a problem.
On the other hand, if you are spending to run away from negative emotions and use shopping as a buffer to feel better, you are most likely overspending and creating a net negative result in your life. You are choosing instant gratification at the expense of the long term gratification that comes from achieving your financial goals.
Let me illustrate the difference between the two.
You can buy a car because you decided that your family is growing, you have a new puppy, and you enjoy going on road trips. You like these reasons, so you plan on saving for it, and when the time is right, you buy the new car.
You can also buy a new car because you've been feeling bad about life in general, so you find yourself at the car dealership checking out the same minivan that your neighbors got a month ago. You end up walking away with a new minivan and think life is better all of a sudden. And it is...But that feeling stays for as long as the hormone dopamine, the "feel-good" hormone, is released by your brain. In a matter of days, weeks, or months, you may resent this purchase every time you write a check to pay for the loan.
We can often be so good at justifying our desire to purchase something that it is hard to see and determine if we are overspending. This is where a coach like myself can step in to help you uncover the reasons and emotions fueling your purchases.
One of my favorite questions to ask as I review my client's budget is, "would you buy this again today?." So much information and awareness can come from this simple question. It also unlocks your power to make a decision over that purchase all over again. You have the choice to sell the minivan and pay off the loan.
Asking "why do I want to buy this?" is also a straightforward yet powerful question. It will reveal to you whether you seek to feel better and escape from experiencing negative emotions. This question may also show you your real emotions fueling your purchase. You may hate making that large monthly mortgage payment, but do you really hate it? Do you love the house you live in? What are you getting out of it besides obvious shelter? You may find out that you have more reasons to love than to hate making that monthly payment.
As you can see, becoming very clear on the fuel (emotion) driving your purchase is critical to determine if you are overspending. Using shopping as our way out of feeling our emotions is one reason you may be caught in the overspending cycle, and bringing your awareness to it is the first step towards finding the solution.
I challenge you to review your budget and see where you are consistently spending over your budgeted amounts. If you don't have a budget, I encourage you to print out your latest bank or credit card statements and highlight the charges you would not incur today. This exercise will highlight where your work is. As you notice and pay attention to your own spending patterns, you can uncover the root cause of overspending and decide to work towards shifting this behavior, so you can align yourself with your long term financial goals and dreams.
Have you tried to stop overspending, and didn't work? I've got you! Not only can I help you build the budget that aligns with the life you want, but I teach you the tools so you can follow through with your plan. You can stop overspending and start saving. Click here to schedule a free mini session so you can get started.
Also, make sure to subscribe to my Blog so you don't miss future articles where I'll explain the reasons why you can't stop overspending and how you can gain control over it once and for all.
xoxo,
Silvina