Breaking Bad Habits – How to Stop Overspending

Bad habits are the things that we do which give us instant gratification or ‘false’ pleasures. For example, if we drink regularly on an evening to wind down after a day at work, we might feel better and more relaxed for a couple of hours, but we may also have a restless night’s sleep because of drinking a bit too much.

Bad habits tend to have knock on effects – for example in this case, being tired during the day because of drinking too much the night before might lead to being unproductive at work or skipping breakfast because we got up too late to make it in time. Bad habits can really cause collateral damage if we don’t try to rectify them!

Why overspending is a bad habit

Overspending can also be classed as a bad habit – can you relate to any of these scenarios?

Scenario 1 – Mindless overspending

You go to the local supermarket because you’ve run out of milk, bread and butter. When you’re in the shop, your eyes are drawn to the abundance of grocery products on the shelves and you end up bringing home two or three bags full of shopping. Instead of spending under £5 at the supermarket, you’ve spent £35. When you get home, you realise that you did actually have some of what you bought at the supermarket in your kitchen cupboards already!

And so you end up wasting money because you have bought groceries that you didn’t need. You promise yourself that you won’t waste anything so you either eat more than you need for fear of your food going out of date, or it goes out of date before you can eat it. You kick yourself for overspending (again).

Scenario 2 – Conscious overspending

Your used car is on it’s last wheels and it’s draining money from your pocket most months with more and more car repairs. You have a sum of money saved up and you decide to spend it on another used car. You figure that if you spend a bit more money, you’ll get yourself a better car.

You know you can afford £3000 for a used car but that’s the top of your budget. When you get to the car showroom, you’re not happy with the cars within your budget because they’re not the right make, model and colour or they have too many miles on the clock.

The salesman tells you that in order to get a better car you could up-spec slightly to £4500 and do a part exchange on your old car for £500. You know you shouldn’t even look at these other cars because they’re out of your price range, but you do anyway. When you see a couple more cars which are nicer, you battle with yourself, trying to figure out how you can get hold of the extra £1000.

You consider all the borrowing options available to you in order for you to raise the extra cash. Temptation wins and you go ahead. You feel guilty but you convince yourself that you are getting a better deal, you’d probably have to pay for more repairs on a cheaper car etc etc. You’ll be ok because as of payday, you’ll be able to claw back some of the extra money that you’ll have paid for your slightly newer car. You drive your slightly newer car home but you’re not quite as happy as you’d thought you’d be about it!

What factors cause us to overspend?

There are many areas where we can overspend if we don’t pay attention to what we’re doing. If we overspend on a regular basis, this can become a really bad habit that we just do without thinking!

We spend sometimes to make us feel good about ourselves, paying more for big name brands – like a nice outfit from some designer shop – because the perception we have of paying more for something makes us feel like somehow we’re ‘worth’ more.

Some of us even overspend whilst believing we’re getting the best value for money such as buying things on 2 for 1 special offer when we don’t really need them. This might be a useful thing to do if we can store extra items or if we’re able to cook food in bulk and freeze it. Over time, that makes financial sense. But spending just because we can’t miss out on a bargain doesn’t!

Here are some of the possible reasons why we overspend:

1. Giving in to the temptation to get something ‘better’ if we just stretch our budget that bit more.
2. Wanting to feel happy about ourselves or the things we have – I think there’s a definite emotional pull when it comes to overspending, especially on impulse.
3. Just not thinking ahead and spending without realising (like in scenario no. 1).
4. Not having control over our finances.
5. Not earning enough to cover our outgoings in general.
6. Thinking that overspending and stretching our finances is normal and that everyone does it.

The knock on affects of overspending

Overspending, whether it’s mindless or conscious overspending, messes us up because we feel guilty after we’ve overspent especially if we’ve resorted to credit to do it. We’re often left out of pocket and sometimes well and truly skint! It can quickly become a cycle of getting deeper in debt if overspending isn’t nipped in the bud.

It’s no surprise that the rest of our monthly budget could be impacted and we might have to go without other things because of the purchases we made. And lastly, any pleasure we’ve experienced from buying something we can’t really afford usually doesn’t last all that long and we start regretting the purchase or wanting other things anyway.

How to break the bad habit of overspending

If you end up overspending on a regular basis, you could try the following to break your habit:

1. Firstly, do everything you can to make sure your outgoings don’t exceed your income. This could mean getting a part time job, a higher paying job or cutting back on your everyday expenses wherever you can.
2. Plan – if you’re going to the supermarket, write your list and ONLY buy what you need on the list. Try not to be drawn towards the temptations waiting for you on the other shelves.
3. If you find yourself facing the dilemma of skinting yourself to buy a better spec model of what you need, walk away for the time being. Go home and think about the possible consequences of stretching your finances and whether you really need the better version or if the cheaper one will do the same job.
4. Dig deep. Figure out what the emotional pull is if you’re about to overspend consciously on something. What’s so great about that item that is about to cost you an arm and a leg? Will it make you happy long term? Separate your wants and needs.
5. Try instilling some new good habits instead. Set your own goals around spending which you know will benefit you, such as not buying anything ‘new’ for one whole month or just using cash only. When you’re tempted to splurge, train yourself to save some money instead.

Habits develop over time, so it makes sense that if you try to do things differently for a set amount of time, you’ll eventually become used to your new way of spending. You’ll be well on the way to forming good financial habits instead!

Is overspending one of your bad habits?