“Where does all my money go?” “Why isn’t there any money left at the end of the month?” “I can’t pay all my bills every month.” If one of these phrases describes you, you probably have a problem with spending. Quite simply, your spending is out of control. People spend money for different reasons. If you want to get your spending under control you first need to identify why your spending is out of control and how to resolve that issue.
Five Types of Dangerous Spending
Spending money, but having no idea where it all went by the end of the month.
Spending money to feel good, to help with depression, or for similar reasons.
Spending money spontaneously. I.e. Going to the store for bread and coming home with bread and a new T.V.
Spending money on an item that you want, but that your spouse thinks is a waste of money.
Spending money on miscellaneous items instead of things that you really need or enjoy.
What Must Be Done to Deal with Dangerous Spending Practices:
- To deal with unaccounted and unplanned spending, keep a budget. If you are married, a budget is an essential part of a healthy financial communication in marriage. Sitting down before the money is spent is a greater blessing to a husband and wife rather than arguing about which one of you spent too much money during the previous month. Look over some recommended budget allocations to help you get started.
- To deal with unaccounted and unplanned spending keep a written record or follow your accounting plan. Unaccounted spending can only be addressed through accounting. Understandably, not everyone is into the whole accounting process. At a minimum, you need to know where 95% of your money is going. This is best accomplished in one of two ways. Either keep every receipt, or put your money into envelopes with money for categories in your budget.
- To deal with emotional spending you will need to ask yourself some honest questions. Why does spending heal emotional wounds? What messages am I telling myself when I spend? What lies have I been taught to believe? How did my parents spend money? Perhaps this would be a good time to sit down with a trusted friend and ask them to help you answer those questions.
- To deal with selfish spending set some boundaries and personal family guidelines. Here is an example: I will not purchase something that my spouse is not equally as excited about. Typically, the items couples disagree over are “want” items – a truck, manicures, sports tickets, or a meal. I have rarely met a person who was upset that someone bought a loaf of bread at the store. If something is a luxury and my spouse does not support the purchase, skip the purchase and honor your spouse instead.
- To deal with unfocused spending you need to identify what you really like spending money on. The problem many people face is not that they spent money on what they wanted, but in addition they spent money on a ton of things that they could care less about. Once again, this is where a budget helps. You can determine where you really want to be spending your money. This kind of focused spending allows you to purchase items that you feel like provide the most return for every dollar. If you are feeling guilty about your spending, it could be because your spending is unfocused.
I love this post. Creating a good spending plan requires that you consider your motivations, and that you know where everything is going. I think it is also worth noting that just because you can spend something, doesn’t mean that you should. I guess that fits under the “selfish” category to some extent, and the “unfocused” category. Spending just to spend, because you can, is rarely a good idea and opens the door to bad habits.
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I find that I have unaccounted spending when I use cash because it is not always easy to get a receipt. Many people hate credit cards but I love mine because I can always have a receipt for what I spent money on and can just enter the receipt into my spreadsheet and see how much I have left to spend.
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Credit Card Chaser says
“Know thyself” I like this post. Sometimes all it takes to change some bad habits is simply to look inward and identify those habits and label them for what they are. I think sometimes that understanding the underlying motivations for making certain purchases can help us to be more discerning about whether to make those purchases or not make those purchases.
Financial Samurai says
I think you should actually “Control the Urge to Splurge” by actually buying the item!
Enjoy it for the return policy period and return it.
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husband in dire need says
dear god, please help us. my wife has maxed out our credit cards and has put us in a financial hole we cannot get ourselves out of.it has destroyed our marriage and possibly our future due to the fact we cant even make our minimum payments.please help her to make the right spending choices in the future for herself,me and our 1 y/o sons sake.i dont want to have to try to explain to him why “santa” didnt bring him anything when he’s old enough to ask.god please help us!