How Do You Stop Yourself From Overspending?  

The urge to splurge is one of the toughest challenges to a monthly budget, and leads to unhappy encounters with the credit card statement.  But psychologists say there are solutions for the chronic overspender.

The first thing to understand is that overspending is viewed as a way to boost our self-esteem or overcome sadness—and if you consider it rationally, an extra pair of boots or a stylish pair of wireless headphones is not likely to provide that comfort for more than a minute or two.

So before you buy, create some space between the spending impulse and the action by asking yourself how you’re feeling.  Bored?  Sad?  Irritated about something at work?

That gets you closer to understanding the nature of the urge.  Then ask yourself: do you really need whatever you’re holding n your hand?  If the answer is not an immediate yes, then put it back on the shelf.  What if you wait?  Is there any risk to waiting a day or two to make sure it’s a good buy?

Finally, an overspender can ask: how will I pay for it?  Is this item in my monthly spending budget?  Do I even have a place to put it?  Often the urge to spend will pass after a few minutes, and might go away altogether for people who pass a 24-hour rule for purchases: if you still feel like you need it, you’ll come back tomorrow and get it.

This won’t cure the urges, but it might cure the most destructive consequences of them.

About the Author: Bob Veres has been a commentator, author and consultant in the financial services industry for more than 20 years.  Over his 20-year career in the financial services world, Mr. Veres has worked as editor of Financial Planning magazine; as a contributing editor to the Journal of Financial Planning; as a columnist and editor-at-large of Dow Jones Investment Advisor magazine; and as editor of Morningstar’s advisor web site:

Mr. Veres has been named one of the most influential people in the financial planning profession by Investment Advisor magazine and Financial Planning magazine, was granted the NAPFA Special Achievement Award by the National Association of Personal Financial Advisors, and most recently the Heart of Financial Planning Distinguished Service Award from the Denver-based Financial Planning Association. 



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