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By Jack R. — Published May 22, 2018
There are those who are incorrigible shopaholics and then there are those that have great control over their spending. People who tend to overspend often find themselves in debt but yet have a hard time breaking the habit. When put in a situation where they see something they like there is no memory of the debt and in that moment they find themselves spending even more on a purchase.
Why is it that some people can fight the urge to buy everything they see and others simply cannot?
The truth is that there is often a more complex reason to overspending. No rational person would intentionally keep accumulating debt which is why we have to dig a little deeper to find the root of the problem. What is it that triggers the need to spend beyond our means even when at the back of our minds we know that we are drowning in debt? The answer comes from psychology. Like any addiction, shopping and spending can have psychological causes and can only be tackled by first isolating the cause and then finding a solution.
What could cause overspending?
Triggers: Many people use shopping and buying things for themselves as a way to feel good. Certain events or situations could serve as triggers that make them feel the need to indulge. For example a stressful situation at work like a confrontation with the boss could be a trigger, and buying something new could relieve the stress for the time being. If you find yourself prone to overspending you might want to keep track of things that trigger you.
Once you have identified your triggers you could try and avoid them or find a new outlet like taking a walk or listening to some calming music to substitute for shopping.
Self esteem issues: Many people who suffer from low self esteem issues tend to splurge on themselves for the feel-good hit of endorphins brought on by instant gratification. If you find yourself spending every time you feel low or lonely think about seeing a therapist to help you address the root cause.
The false credit card safety net: Credit cards have made it easier for us to spend more than what we have. There is a false sense of security that you will pay back your full bill amount some day. But if you are consistently only paying the minimum bill amount, making late payments or defaulting on you bill, you have a spending problem. A tough but good way to prevent overspending on a credit card is by cutting that card in half. Yes, it’s a hard choice but if you want to stop the cycle you need to make it.
Your relationship with money: Your relationship with money has a lot to do with your upbringing and your family’s attitude towards money. If you were brought up believing that money was never enough, you could develop a lack mindset. A lack of money mindset is a limiting belief that keeps you from saving money and handling the money you do have well. If your subconscious beliefs are that there is not enough you will unknowingly do everything you can to make this a reality. Identifying a lack mindset is the first step to changing your relationship with money.
How can bad spending habits be overcome?
Once you know your reason for overspending you can get the right help that you require. You can also learn how to manage your money better and pay off your debts by reading financial journals and books. If you can manage it then you could consider a financial advisor to set you on the right path to getting out of debt and building wealth.