Are you finding it difficult to stay on top of your finances? Do you get paid and then simply find yourself without any cash in the bank? What is your relationship with money like? If you find yourself overspending month after month, now is the time that you need to break the cycle. Have you considered the consequences of overspending? Let’s take a look.
Why Are You Overspending?
The first thing before getting to the consequences of overspending is to figure out the reason you are overspending in the first place. There could be many different reasons that lead you to spend money. We all have a past. Experiences and life events that impact us. For many people, spending comes into play. Even when they don’t actually need to buy anything. It can fill a void. It can provide a distraction.
For others, there might not really be any particular issue. It could be that they once had the cash to fund a lifestyle but the financial situation has changed, yet the spending hasn’t. There are lots of reasons why overspending happens. What is yours?
The Consequences Of Overspending
Overspending can lead to many issues for you now and in the future. Without putting a stop to that overspending, things can quickly go from bad to worse. Some of the consequences of overspending are as follows.
Living From Paycheque To Paycheque
By overspending, you can quickly find yourself living paycheque to paycheque. Most of us get paid monthly, so if your paycheque only covers the money you owe, you are going to find yourself without any money all month. That’s 30 days without being able to put food on the table, without being able to make the mortgage payment. How can you get to work if you cannot afford the fuel for your car or the ticket for the bus? Living paycheque to paycheque also means that you cannot put any money into savings or into an emergency fund. Whilst you need to organise your finances for the here and now, your future finances will also be suffering from this overspending.
Increased Borrowing
With the lack of finance, you are more likely to start borrowing more money. This will lead to more debt and it can slowly circle you into a much worse situation. If you have to resort to borrowing for the day-to-day things because your salary only clears your overspending, you’re going to end up owing more money, with interest on top. Many people are able to find 0% interest cards that can help them clear some of their debt, however, others don’t have that available and can be tempted by high-interest borrowing and even loan sharks. You might even find that this impacts your credit score and changes your ability to borrow in the future. That isn’t ideal if you were hoping to get a mortgage at some point.
Stress, Anxiety & Sleepless Nights
Another of the consequences of overspending is the impact on your own mental health. If you are constantly fretting about finances, you will have a huge amount of stress on you both mentally and physically. Your anxiety and worry could be through the roof and all of this can lead to sleepless nights. According to research, 88% of Brits say that money worries keep them awake at night. There is enough to worry about in life. Don’t add to it by overspending.
You Could Lose What You Have
Whilst you might feel good about spending money because of the ‘hit’ it gives you, this overspending can actually lead you to lose what you do have. The stuff that you love is on the line here. It could be your home, your job, your relationship, and even your children. Do you want to end up on the streets? Homeless with loads of debt? Do you want your relationship to be impacted so much that there is no other option but to end things? One of the huge consequences of overspending can be losing what you hold dear to you.
Budgeting Is Your Best Friend
One of the best ways to get a handle on your finances is my budgeting. Budgeting is a way of finding out exactly how much money you have coming in and what is going out. You need to account for every pound, every penny.
When you see things in black and white, in actual figures on a piece of paper or computer screen, you can see exactly where you are spending. This will allow you to see what money you have left over after paying bills. This can be split into budgets for paying off debt, your food budget, and other areas of life you need to finance. You could even budget a small amount of what is left over for savings.
Making a budget isn’t enough though. You have to stick to it. You need willpower to break these habits and by sticking to the budgets you make, you can turn your financial situation around.
There Is Help Available
If you struggle, there is help available. Help you don’t have to pay for so don’t fall for one of those scams. Contact places such as Citizens Advice, National Debtline, StepChange, and CAP UK who can offer advice and much more. Admitting that there is a problem and asking for help is a difficult first step. But it is the first step to change.
The consequences of overspending can end up being utterly life-changing. You might not think that you have a problem, but if you are spending more than you want to be and are finding it hard to stop, now is the time to put changes into place.
