While most of us may not believe we have a spending problem, many of us live in denial and actually do have a spending problem. I would feel safe to say that the average person has or has had a spending problem at one time or another.
Here are a few ways to know you may have a spending problem:
#1: You only pay minimum payments on your maxed out credit cards. If your credit cards are all maxed out and you can only afford to make the minimum payments, you have a spending problem. You are living beyond your means and using credit cards to cover your living expenses. This is a big problem! What happens when you run out of credit? Avoid using credit cards and only pay cash. Live as though you do not have access to credit cards then work diligently to pay them off.
#2: You pay your bills late. Paying bills late usually means you don’t have the money to pay them when the bills are due. If this is a common occurrence, you may be overextended and spending too much money. Get a grip on your spending now or those late payments will lead to even more financial hardships. Set up automatic payments and do not spend any discretionary money until the bills are paid first. Another idea is to set up a savings account on the side for discretionary money so that you aren’t tempted to use your actual budgeted income on discretionary spending.
#3: You are using payday loans to pay your bills. Under no circumstances would I ever suggest you take out a payday loan! These loan companies often charge from 200% to over 600% interest on loans! The rate you are generally quoted is a daily rate, not an annual rate as most banks and financial institutions quote so you would need to calculate the annual rate to understand exactly how expensive these loans can be. If you think I am joking about the interest rates that are charged, just do an internet search on a payday loan company in your area. I did and was appalled by the interest rates charged to customers! Unfortunately, many individuals do not understand how payday loans work so they do not know to avoid them.
As humans we tend to want things that we don’t have or that others own. You know the “keeping up with the Jones” syndrome. I wish I could meet the Jones and just let them know I am tired of trying to keep up with them! Wouldn’t it be great if we could just be content with what we have and what we can afford? Contentment seems to be scarce in our world today. I say we try to find contentment again and stop the overspending before it is too late!