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Personal Finance – 2 Major Reasons Why People Overspend and Yet We Still Do It

Personal Finance – 2 Major Reasons Why People Overspend and Yet We Still Do It

What are the common causes of overspending? The number one factor is still spending on credit. Well, this article will discuss the two most common causes. Overspending is best defined as the act of spending more than you earn.

Influences and events

Going out with colleagues, friends and people alike will have a great influence on how you spend your money. What happens when a bunch of your friends agree to go to an expensive restaurant? Majority of them have agreed. But what about you? You do not want to be a party spoiler, so you agree as well. The thing is, some of your friends have more money than you do. On a side note, thumbs down to them (if you have friends like this) for not being understanding.

Other than food outings, forgetting your long term financial goals and making side purchases can have a negative snowball effect of overspending. You will want to keep a balance between living in the now and planning for the future. Your spending habits should be controlled by you and only you, not others.

Spending money to feel better

Sometimes you think you deserve a cheat meal or a vacation, especially after working so hard for the past few months. But the irony is when the hefty bill arrives and you would have already overspent at that point. Addictions can arise due to spending, too, according to studies. If you realize you are one of these people, be sure to look for alternatives in healing the soul. Spending money to make you feel better definitely is not a smart thing to do.