Compulsive spending could wreak havoc on your finances. Read on to know about the signs of this bad habit and ways to avoid it.
When it comes to handling money, there are two kinds of people. Those who like to save and the rest who indulge in spending with a thought, there is no tomorrow. If you are one among those who get the urge to spend money often without focusing on anything else, then there is a great chance that you are into compulsive spending.
How, when and why you spend the money impacts your personal finance. So, it is very important to analyse your spending pattern and check it there itself to save your wallet and financial future.
Here is how to understand your spending pattern.
Are You Addicted To Shopping And Spending?
Shopping is an addiction. If you mindlessly spend money on shopping and get into a debt by taking Loan to fulfil your urge, then it shows your compulsiveness towards spending the money, posing a risk to your personal finance. A compulsive spender does his recce well about the malls and best offers and ends up buying things which are unnecessary most of the time. Compulsive spending is a process in which person never feels satisfied despite continuously spending his/her money. It can badly impact the personal finance in short as well as long-term.
To curb your spending habit, it is best to assess your needs and finances before getting into a shopping mode.
How It Can Impact Your Personal Finance?
If you are a compulsive spender, then this habit can adversely affect your personal finance. The day you’ll receive the monthly salary, you’ll look ways to spend it instead of following your financial goal. This can have an adverse impact and may result in non-payment of electricity bill, telephone bill, children’s tuition fee, irregular EMI payment, etc. Similarly, you may not like the idea to invest money to accomplish your financial goals because then you are left with less money to spend and satisfy your urge.
A person who suffers from a compulsive spending problem may fall into a debt trap easily, spoiling the Credit Score and become financially distressed in a few years. Therefore, it is very important to diagnose the problem of compulsive spending as early as possible and address it at the earliest.
What Can You Do To Avoid Compulsive Spending?
Compulsive spending is a problem which triggers due to emotional reasons such as anxiety, depression, anger, loneliness, etc. When a person finds himself in an emotionally pressing situation, then the urge for compulsive spending triggers. If you can identify such triggers which drives you for compulsive spending, then you can take steps to avoid such situation or to control your urge. Taking the help of a psychiatrist or a therapist can be of great help.
Things To Keep In Mind
You must also look into your financial habits to avoid indulging in spending binge. It could be a good idea to use cash instead of Credit or Debit Card while shopping to control the urge of unnecessary or overspending. You must allocate some portion of your income for spending every month. Stick to your plan and do not borrow money once your allocated fund is exhausted.
Tracking the expenses with the help of apps or writing in a small diary can help a lot in reducing the unnecessary expenses.
Try to delay the spending by 10 minutes or 20 minutes, it can help you calm down and avoid the spending urge. Connecting with people, social activities, joining clubs, charity etc can also help in stopping the compulsive spending urge.
If you learn to say ‘no’ to yourself when the urge arises to spend the money, then it will make you emotionally stronger and help you to reorganise your spending habit.