Money spending problems are a real thing. Whether you spend too much or have a problem spending money at all, it’s a big deal.
Your spending habits impact your personal finances in a major way. If you are ready to tackle your money spending problems, then we can help!
In this article, we’ll explore different spending issues and identify steps that will help you move forward.
Money spending problems: Navigating two extremes
Money spending problems are a tale of two extremes.
On one hand, you might feel guilty about spending any money at all. But on the other, you may not have the willpower to keep your spending in check.
If you know that ‘I have a problem spending money,’ then you know which category you fall into. Here’s a closer look at both sides.
You might feel guilty when you spend money. This can make you not want to spend anything.
One common reason to feel guilty is an emotional conflict. Conflicting emotions about money can result in guilt.
As a consumer with the funds to make a purchase, you might feel guilty not giving the funds to charity or putting it towards a ‘worthy’ goal in your budget.
Another reason you might feel guilty after spending money is that your purchases don’t align with your values. For example, if you are making purchases to keep up with the Joneses, a bit of buyer’s remorse isn’t uncommon.
Even if your finances are in a really good place, spending guilt can stop you from feeling happy about your money situation.
On the opposing side, reckless spending might be the result of compulsive buying behavior. If you can't seem to stop yourself from overspending, you aren’t alone. In fact, compulsive overspenders represent 6% of the American population.
Overspending is easy with accessible credit cards and buy now pay later shopping options. With the availability of credit, it might not be surprising that the average American has $5,221 of credit card debt and $17,064 of personal debt.
A few signs of reckless spending include mounting debts and dropping credit scores. Some people might also use shopping as a way to help you feel better. Reckless overspending is usually a form of retail therapy gone too far.
How to spot the signs of money spending problems
A money spending problem is not an ideal situation for anyone. That said, here’s what to look for:
Signs of reckless spending
If you have reckless spending tendencies, you might relate to a few of these situations. You may find that you've experienced these problems often.
Shopping makes you feel better
If shopping makes you feel better, then you might be tempted to swipe your card even if you can’t afford the purchase. As with all addictions, you might feel a ‘high’ as you make the purchase, even if you don’t need the item.
Shopping to make your day better is a slippery slope. It’s an expensive way to feel better.
Secret spending is a big red flag. That’s especially true if you are hiding your purchases from a life partner.
Ask yourself why you can’t show off the new purchases. Which forces you to think about the reasons behind your shopping adventure.
Depending on your situation, you might be making your purchases on credit. Whether you tap into a credit card or sign up for a buy now pay later service, growing balances are a bad sign. That’s especially true if you are dangerously close to maxing out your credit cards.
A spending problem with a cushioned bank account is one thing. But if you start slipping into credit card debt, the high interest rates can make your debt spiral out of control.
Shopping without a reason
For most, the goal of shopping is to purchase an item that satisfies a need or want. If you find that you're heading to the store or browsing online without a want or need in mind, that could indicate a spending money problem.
Buying simply for the thrill of buying an item isn’t a good enough reason to shop.
Signs of spending guilt
Want to know if you have spending guilt? See if you relate to the following situations.
You avoid spending money, even when you should
Spending money is unavoidable in some cases. For example, you might have the money to purchase healthy groceries to nourish your body. But you might choose the cheapest groceries just for the sake of saving a few bucks.
If you want to eat healthier food and have the cash available, then having a problem spending money could be a sign of a deeper problem. It can be difficult to let go of the funds you worked so hard for. But ultimately, money is there to take care of your needs.
You believe you don't have enough money
A scarcity mindset is another reason to hold onto your cash. If you feel like there’s never enough money, then hoarding it is the only logical solution. This mentality can lead to constant worrying about money and struggling to spend it in appropriate situations.
How to tackle a money spending problem
Money spending problems are an unfortunate conundrum. But the great news is it’s possible to make a change. Here are some strategies to help you move past your money spending problems.
Visualize your goals
Money is an important tool to help you achieve your life goals. The first step to getting your money spending problems under control is to visualize your goals.
Financial goals can include anything from breaking the paycheck to paycheck cycle with an emergency fund to saving for homeownership or a lavish vacation.
Take a bit of time to write down all of your big financial goals. Don’t be shy! Write down everything that comes to mind.
Build a budget based on your goals
With a clear idea of your goals, consider what amount of money it will take to accomplish them.
For example, let’s suppose that you want to make a $10,000 down payment on a house based on the prices in your target area.
If you want to purchase a home in two years, you’ll need to save $416 per month. You can break down any of your goals into money savings goals.
It's also important not to become so budget obsessed that you still experience spending guilt. Your budget is there as a guide, not to make you feel bad.
The monthly savings goals will help you build a budget that you can get excited about. Our free budgeting course can help you create your budget and make it perfect for your life.
Remind yourself what matters
When you are considering overspending, think back to your budget. If the goals are exciting enough, they might sway you towards saving for what matters to you instead of overspending in the moment.
One way to keep your budget at the top of your mind when spending is to put a note in your wallet. Each time you're about to use your credit card, a sticky note can remind you of your long-term money goals.
Another option is to make your most important savings goal a screensaver on your phone. Each time you pick up your phone, you’ll see a picture of your dream home or a goal vacation that encourages you to prioritize the budget.
If you are undecided about an item, give yourself some time to think. A slow shopping strategy gives you the space you need to make purchases that really matter without the pressure of checking out immediately.
If you make a mistake, that’s okay. In some cases, you can even return the purchase causing buyer’s remorse, and have no harm done to your budget!
The bottom line: Moving past money spending problems is possible
You might have discovered, "I have a problem spending money!" As you navigate the process of reworking your spending habits, be kind to yourself.
It’s very easy to make mistakes along the way. But rather than beating yourself up for it, just move forward.