Hi guys! Welcome back to my blog! I hope that you are all spending a blessed All Saint's day here in the Philippines and are having an awesome Halloween on your country as well!
Today, I want to talk about Overspending. We'll tackle what it really means, why it happens and how to stop it.
What is Overspending?
Basically, overspending means living outside of your means. You are spending more than what you really have. If you were given Php 500 allowance for the week, you most likely have spent Php 600 causing you to either ask for more allowance or borrow money from a classmate or friend.
Why do we Overspend and How do we stop it?
1. Misconception of having lot of money
This happens especially to those students that are given monthly or weekly allowances. At the begin of the month or week, there's this feeling that you have so much money to spend with! (which is obviously not true) And so, he/she might be tempted to use it on unnecessary things. You need to pause and remember that this will be your allowance for a span of time and assess first how much you'll need everyday, making sure you've covered it first before spending that rest on what you want.
2. You don't have a clear Budget to begin with
This happens especially to those students that are given monthly or weekly allowances. At the begin of the month or week, there's this feeling that you have so much money to spend with! (which is obviously not true) And so, he/she might be tempted to use it on unnecessary things. You need to pause and remember that this will be your allowance for a span of time and assess first how much you'll need everyday, making sure you've covered it first before spending that rest on what you want.
2. You don't have a clear Budget to begin with
For me, this is the number 1 reason why a person overspends. I get my allowance on a monthly basis and before the start of every month, I would manage that allowance by making a budget (see: How I budget my Allowance) to make sure I can cover all my anticipated expenses, use a portion of it to save and invest, and the rest goes to my daily expenses. I will always save first before spending.
3. You have a Budget but it's not correct
I'm guilty with this one on a few occasions, you might have not anticipated correctly or underestimate/overestimated you budget. It's important to update your budget regularly so that you can be sure it really works for you!
4.Need to keep up with the current trends
I'm guilty with this one on a few occasions, you might have not anticipated correctly or underestimate/overestimated you budget. It's important to update your budget regularly so that you can be sure it really works for you!
4.Need to keep up with the current trends
Maybe, there's a new phone coming out? or a new game console? Maybe it's because there's a new fashion trend and all your friends are starting to wear it. Keeping up with the trends, make a person, especially, young adults feel like they belong to their group or circle but it's not necessary to do so. Trends will most like come and go, and by the end of the month you'll find yourself buying the next big thing. Sure, if you can afford to do so, then that's good, however, if you know that this is beyond your budget then you better think twice!
5. It's Human nature?
Mr. Edric Mendoza of ANC addresses this as, people always wanting for MORE. When a person has means they would start a cycle of greed and end up wanting more. However, we also have a capability to change that way of thinking and focus more on what we need rather what we want.
For me, overspending isn't just a situation a person faces, it could also be a lifestyle for other people. It's important to break from it while we're still young, that way, we are surely one step closer to financial freedom!
Thanks for tuning in! What financial concept would you like to talk about next time? Comment them below and see you next Tuesday!
Note: Found that cute little piggy bank image from Google, credits to its owner!
5. It's Human nature?
Mr. Edric Mendoza of ANC addresses this as, people always wanting for MORE. When a person has means they would start a cycle of greed and end up wanting more. However, we also have a capability to change that way of thinking and focus more on what we need rather what we want.
For me, overspending isn't just a situation a person faces, it could also be a lifestyle for other people. It's important to break from it while we're still young, that way, we are surely one step closer to financial freedom!
Thanks for tuning in! What financial concept would you like to talk about next time? Comment them below and see you next Tuesday!
Note: Found that cute little piggy bank image from Google, credits to its owner!
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