Modern technology has made it easier to make purchases anytime and anywhere, whether you're using a debit card to shop in person or a credit card to make purchases online. Simultaneously, the cost of living for most Americans has increased significantly in recent months.
An increased opportunity to spend, paired with higher prices, means consumers may face an increased risk of overspending—which often stems from impulse purchases that result in adverse consequences, such as crippling credit card debt or a lower credit score. Below, we'll discuss how to identify overspending while also sharing actionable tips to help you keep things in check.
How to Identify Overspending
Identifying overspending begins with taking an honest account of your spending habits. Look for these telltale signs of overspending:
Consequences of Overspending
Left unchecked, overspending—like many bad financial habits—can have severe consequences. Spending too freely may result in a credit card balance you can’t pay in full at the end of the month, leading to ongoing debt that may be difficult to pay off due to the high interest rates on most credit cards. A high account balance also has the potential to lower your credit score, which may make it more difficult to secure additional credit.
Overspending can also have personal and social consequences. Carrying debt can contribute to stress and anxiety, affecting your relationships and mental health. A low credit score may make it more difficult to work towards milestones, such as planning your dream wedding, buying a home with your loved one or saving for a child’s education.
How to Prevent Overspending
To avoid overspending, you must conduct an honest analysis of your spending habits, as well as set some financial goals to ensure that you are using your money purposefully:
Prioritize Your Future
Ultimately, becoming mindful of the way you use your monthly income is the key to avoiding overspending. No matter what your financial goals are or what your personal budget looks like, becoming conscious of where your money is going—and assessing how well that aligns with your long-term goals—can help you reduce the mindless spending or impulse purchases that often result in overspending.
Busey offers several tools and resources that can help you overcome bad spending habits, such as our eBank Money Manager, Home Budget Calculator and full suite of Financial Pathways complimentary online modules—which are full of tools, tips and resources that can help you build a strong financial future for you and your family.
This is not intended to provide legal, tax or accounting advice. Any statement contained in this communication concerning U.S. tax matters is not intended or written to be used, and cannot be used, for the purpose of avoiding penalties imposed on the relevant taxpayer. Clients should obtain their own independent tax advice based on their particular circumstances.
This material is provided for educational purposes only and should not be construed as investment advice or an offer or solicitation to buy or sell securities.
This presentation is for general information purposes only. It does not take into account the particular investment objectives, restrictions, tax and financial situation or other needs of any specific client.
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