Overspenders, also called shopaholics or compulsive spenders, are people who spend beyond their means and often fall into debt because of their irrational spending. Sure, we all deserve a nice dinner or new pair of shoes every now and then, but overspenders struggle to say no to these types of purchases every day. Check out these 10 signs of overspending to see if you fit the bill:
- You buy items you don’t need and never use
If you can’t shut your closet door or make room in your garage because of the stuff you buy and never use, you may be an overspender. Whether it’s clothes, shoes, electronics or cookware, you are likely buying things you don’t need and won’t truly use. Once these items pile up, they lose importance and become just stuff you enjoy buying. - You charge more than you can realistically pay
Maxing out your credit cards and spending more than you can afford are clear-cut signs of overspending. Spending above your means is not healthy, because you are digging a hole of debt that will be hard to get out of if you don’t have the money to pay up. - You hide your purchases and feel guilty or embarrassed for irrationally spending
If you hide purchases from your partner, family and friends, and argue with them over your spending habits, you may be an overspender. When the people closest to you notice your irrational spending, they will often interject and urge you to change your habits. You may feel guilty or embarrassed for spending more than you can afford, which shows you’ve gone too far. - You obsess over money
If you go to bed and wake up thinking about money, such as how much you’ve spent, how little you have or what you want to buy next, you may be obsessed with money and spending it. With money on your mind and debt piling high, you may become frustrated, stressed and depressed, causing you to spend more money to feel better. - You have 5 or more credit cards open in your name
Plastic is far easier to spend than cash, which may explain why you have five or more credit cards in your name. The more credit cards you have, the easier it is to spend more and spread out your purchases, but the harder it is to manage multiple cards and pay all of them. Besides, if you aren’t paying your credit cards, it doesn’t matter how many you have open because your credit score will be in shambles. Limiting your amount of credit cards and paying each one off, will help deter the temptation to overspend and allow you to get ahead of your debt. - You ignore paying your bills or only pay the minimum amount
Unopened or unpaid bills are a bad sign of overspending, because it shows you are incapable of making payments or don’t care about having debt. Nothing good comes from this kind of denial. Not only are you ignoring your fiscal responsibilities, but you are putting yourself in a load of debt and a future of credit problems. In addition, only paying the minimum payment for your credit cards is not going to help your credit or overspending problem. Instead, you are likely to continue spending freely, while the debt rises and your issues persist. - You are out of money by payday
If you find yourself living paycheck to paycheck, you are overspending. This is a dangerous habit because you have no cushion for emergencies, and if you lose your job you’ll be completely broke. Living paycheck to paycheck prevents you from saving money, and makes it difficult to get ahead or pay off growing debt. - You use credit cards to pay for everything, even when you have cash
Instead of taking out cash or using the money you have on-hand, you insist on using your credit cards to buy even the smallest purchases. Putting all of your purchases on credit cards creates a false sense of financial security because it lets you keep cash in your wallet, while ignoring how much you’ve actually spent. Carrying cash and using it on smaller purchases will give you a physical, realistic idea of how much money you’re spending on a daily basis, and if you are in fact an overspender. - Your checking account is frequently overdrawn
Credit cards aren’t the only form of payment you can get into trouble with. Overdrawing your debit card and bouncing checks are other signs of overspending. Whenever you use a debit card or write a check to make a purchase or withdrawal for more than the amount in your checking account, you’ll overdraw and subsequently receive an overdraft fee for having insufficient funds. Over time, overdrawn accounts can be shut down and unpaid overdraft fees will be turned over to collections. - You pay off debt but feel urges to spend freely again
You haven’t learned your lesson if you pay off debt and want to start spending irrationally all over again. This cycle of overspending is not healthy because you can easily fall into debt again. Getting out of debt is difficult, but it does not mean you should reward yourself by splurging. If you feel urges to go on a spending spree even after paying off debt, you may be an overspender.
If your child is about to go back to school and you have to make that dreaded run to the mall to buy new clothes then one great reason to delay is to take advantage of tax-free shopping that some States offer. You can effectively skip the sales tax which results in instant savings on items that are needed for school like clothing, computers, and related items. You better believe that the stores will be packed with other people trying to get in on the savings and it’s easy to see why. Who doesn’t like skipping sales taxes? It’s great for customers and a huge financial win for local stores. There are rules and we have done our best to define them below by State for you (hope you are not seeing this too late):
