Are you a compulsive spender? Learn how to curb the urge to overspend

Are you a compulsive spender? Learn how to curb the urge to overspend

Viral BhattUpdated: Saturday, April 02, 2022, 07:19 PM IST
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Are you a compulsive spender? Learn how to curb the urge to overspend |

Some things are not taught but are innate, such as the habit of overspending. Nobody teaches you how to ‘overspend’. However, the truth is that few teach you how to spend money wisely.

Before we understand how to restrain ourselves from overspending, one should know why is it necessary or how overspending is bad.

1. Like the old saying repeated ad nauseam in Hindi films: Paise jhaad pe nahi ugte (money does not grow on trees) is metaphorical. That oft-repeated phrase makes you understand the efforts required to earn money. Be it a 9-to-5 job or a stressful business meeting, everyone knows, the hard work behind earning a living. Now, since we know how hard it is to earn, is it really wise to spend it on unnecessary things? Think about it.

2. Overspending massively hampers savings and at times, your emergency fund as well. Overspending occurs when you breach your fixed expenses barrier. As a result of this, you then encroach upon your field of savings or emergency fund. Imagine the launch of a new iPhone and your office colleague getting it on the first day. Does that make you overstep your expenses? It is tempting for some.

3. When you overspend, you create unwanted debt especially when you do not have enough cash reserves. The urge to overspend is so hard to overcome that we often fall prey to a credit card or personal loan debts. Not only are these loans expensive in terms of interest, but they are also often the party killers to your CIBIL scores if not paid on time.

I don’t think anyone is born a wise saver or a born spender. Human psychology suggests that spending habits are often determined by the upbringing of the child. Parental habits often determine how the child’s spending habits will be structured.

In case you are a compulsive spender (can’t help it, you may say), here are some tips to curb the urge and save:

1. Be sentimental about your money: One of the glaring differences between a spender and a saver is the habit of the latter not giving away a single paisa. Savers always have a tough time parting with their money even if it is for their basic necessities. The reason for such rigid expense-averse behaviour is their emotional connection with their hard-earned money and the pinch-like feel they experience while spending it. Even if you can attain half of what they feel, your objective is achieved.

2. Every expense counts: Even if it is as small a habit as drinking coffee daily at your favourite coffee house. Overspenders are often under the misunderstanding that only big cars or lavish houses contribute to overspending. However, little expenses matter if these are consistent.

3. Spend on stuff that adds purpose to your life: Not only does such spending make you feel better, but then it becomes easier to ‘sacrifice’ on unwanted spending.

4. Automate savings, because you cannot spend when you don’t have money: Overspenders, as a species, never believe in the word ‘savings’, let alone act upon it. The reason being their urge to spend is so high, that they have their expenses lined up even before the salary hits their bank accounts. Their online shopping carts are always overflowing along with their bucket list. Let us, for the time being, not even go to their social media accounts which have so many unfulfilled dreams. So, in such a scenario, if we can automate our savings, and through an investment such as a Systematic Investment Portfolio (SIP) mandate compulsory or any other useful tool to keep aside a portion of the paycheck, that would be one of the ways to curb the tendency to overspend.

Readers who are overspenders may be tired of the tips. But here is an upside: Overspenders have many advantages over savers such as a quick decision-making ability, living a fun-filled life (though unplanned) and the ability to steer from being debt-ridden to being debt-free by just cultivating a saving habit, too. It is not always advisable to be just a saver of money. A balancing act between a spender and saver is where you achieve the optimum personal financial plan along with stress-free life which may occur on account of overspending.

(The writer is Founder of Money Mantra — a personal solutions firm)

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