Overspending money is the act of spending more than budgeted for or above the needs of an individual. The problem is most experienced when an individual has received some income in the form of monthly earning or some business profit. The experience is based on most households and caused by the following factors. The purchasing new stuff, forgetting to plan and budget for one's need and the use of credit card more often. The person who is affected is the over-spender considering that after a short period he or she will go broke. I am of the opinion that overspending may make people incur a lot of debts which may stagnate personal developments. It may also lead to a situation where a person lacks money most of the time and being unable to solve emergency needs. The following are some of the solutions to overspending. Budgeting for all the finances and spending according to the budgeted, stopping the use of credit cards in the place of debit cards and creating the needs vs. wants list.
Budgeting for all the finances and spending according to the budgeted will leave no chance for any impulse purchase and give every cent a worthy use. The person may find room for saving some money out of the earned for future emergencies. It also makes a person to be organized while handling money. The solution also allows an individual to keep out of debt. In the event a person is in debt, it helps you work your way out. An example that supports the solution is through the calculation of the money earned against the available debt. The calculation will ensure that separate amount of money is set aside for clearing the debt. Another example is the establishment of a rainy day fund for emergencies courtesy of budgeting. Therefore, the examples provided supports the reasons since they qualify to budget as one of the organized ways of spending money. They also give proper utility to the earned money and mitigate cases of wastage.
The stoppage of the use of credit cards in place of a debit card is also an important solution which can help manage to overspend. It does away with everyday expenses like the settling bills for afternoon lunches. It equally limits the purchase of good on the debt. In most cases, people tend to consider their credit card limits and take little interest in the increasing debt. The result will see the person having unmanageable debt. An example to support the argued is a person considering to engage in buying of stuff with the credit card and having no feeling of the impact as in the case of a debit card or cash. Avoiding the use of credit cards also ensure that the feeling of overspending is felt and mitigated. The other example why credit cards should be avoided is based on the impression of a person purchasing with the mentality of considering the balance of the credit and debit card as the available finances thus engaging in overspending. Therefore, the reasons provided are focused on ensuring that a person limits or avoid purchase with the use of credit cards to avoid unnecessary debts. The use of cash or debit cards also offer a sense of responsibility since the balance reflected is for the available savings only.
Creating the needs vs. wants list is another solution towards overspending. A need is what people cannot do without and must be met. It includes food, shelter, and other basic commodities. On the other hand, a want is based on one's desire, for example, a vacation home or putting on designer clothes. Therefore, the creation of the needs vs. wants list will enable a person to prioritize on the basic expenses for the needs. It will also enable a person to choose the want that can befit the available money after the needs have been met. For example, before planning to buy a car, one will consider that month medical covers are paid for and the basic commodities availed in the house. Another example to support the solution is on ensuring that a person is not faced with a situation of having a want and lacking a need. Therefore, the concluding sentence to back this point recognizes the needs vs. wants list as the only solution of living according to the available money without any constraints. It enables a person to live comfortably with all basic needs met and little wants which may lead to overspending.
In conclusion, budgeting the available money, avoiding the use of credit cards in the case of debit cards and making the needs vs. wants list will enable one to avoid overspending. Overspending has got many disadvantages to a person's financial life hence must be mitigated by the provided solutions. It makes a person incur huge debts and appear broke on most occasions.
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