Back

Apr
12
2018

Bouncing Back from Bad Spending

by CashTime Loan Centers

It happens. Sometimes, despite our best intentions, we spend more money than we should. We understand. After all, you’re only human! Overspending can derail your budget faster than a speeding bullet, shooting your best money management efforts in the foot. A money misstep doesn’t have to be crippling, however, if you know how to bounce back from bad spending. The key to preventing bad spending lies in understanding why it happens in the first place. Every good salesperson knows that most purchases, especially the unplanned ones, are fueled by emotion rather than logic.

For instance, you may arrive at a car dealership knowing you need a new car, but not zeroed in on exactly which make and model you want. The car salesman’s job is to assess your innermost desire and convince you that a certain car (probably more expensive than the one you plan to buy) will make all your dreams come true. He will play to your emotions, convincing you that the fancy late model sports car will look so great in your driveway that the neighbors will be envious, people on the street will look twice, and you’ll feel like a million bucks every time you slide behind the wheel. If you allow your emotions to take over, you’ll likely end up with a sports car when what you really need is a family car.

Playing the comparison game is one way to end up spending a lot more money than you planned, and often results in making bad purchasing decisions. It’s important to understand that you don’t need to “keep up with the Joneses” or anyone else. If you have a budget, which is simply a plan for how you will spend your money, you’re less likely to allow your emotions to get the best of you and be swayed by emotions like envy or jealousy. Sometimes the people with all the nice things are heavily in debt and don’t actually own anything outright, anyway. Don’t be overly concerned with what people think; only you know your true financial picture, and you could be in better shape than you think.

When you do overspend, don’t get in a funk. See the mistake for what it was and ask yourself what motivated the decision to spend too much. If you understand how and why you spent too much, you can avoid a reoccurrence. Sometimes we shop and spend when we feel bad or low emotionally, because buying something nice makes us feel better (until we get the bill!), and sometimes we spend too much because we are celebrating something like a birthday or promotion. Again, having a budget and sticking to it can alleviate the impulse to spend too much, because you know exactly how much to allow yourself to spend. Budgets give us the freedom to spend with confidence, and if you include a “fun money” category, you can celebrate every month, or let that category build and have extra money when the urge to make a celebratory purchase strikes.

One or two instances of bad spending doesn’t mean you’re doomed to a lifetime of overspending. Look at your failure to stay within your budget as a stepping stone, a lesson on the way to financial freedom, if you will. Failure can be a good thing, because at least it means you’re trying! If you didn’t have any budgetary framework in place, you wouldn’t know you’d overspent, right? Success doesn’t just happen by itself, it takes effort. If you never try anything new out of fear of failing, you will never experience the success you want in your financial life. So give yourself a break, learn from your misstep, dust yourself off and try again. You can do this!