If these signs apply to you, you may be going too far.
- It’s easy to lose track of what you’re spending, especially in a time when consumer costs are higher than usual.
- Establishing a budget is an easy step you can take to better control your spending and avoid a financial blow.
Unless you really check your bank account or credit card balance every day, it’s easy to lose track of how much you’re spending. This is especially true today, when high inflation has caused the cost of consumer goods and services to skyrocket. But if you’ve gone overboard on spending, it could seriously hurt your finances. Here are three signs to know if this is the case.
1. Your savings account balance is decreasing
From time to time, you may need to dip into your savings account to cover your bills when your salary is insufficient. It’s not necessarily a problem. After all, that’s what savings are for. But if you start noticing that your savings balance is constantly decreasing from month to month, that’s a sign that you may need to rethink your spending and reduce it.
2. You keep adding to your credit card tab
Carrying a credit card balance is something a lot of people end up doing from time to time. But if that balance keeps growing month over month, that’s a sign that you may be spending too much given your income. That’s not great, because while a small credit card balance may not cost you as much interest, a larger balance may be more financially damaging. Too large a credit card balance could also lower your credit score, making it harder to borrow affordably when you need it.
3. You are far from reaching your financial goals
Maybe you’re trying to save for a house or saving enough money for a down payment on a new car. If you find that you’re not getting anywhere with these goals, your spending habits may need to be reviewed.
How to Avoid Overspending
If you’re guilty of overspending, there’s a potentially simple solution: put yourself on a budget. This way, you’ll have a clear idea of what your various bills look like, and you may have a much easier time identifying which expense categories to prioritize and which to cut back on.
For example, once you set a budget, you might find that your grocery bills are $100 more per month than you thought. This may prompt you to cut back on another expense, whether it’s canceling your gym membership or pausing your cable plan.
You can budget yourself on a spreadsheet or explore the different budgeting apps that can help you easily track your expenses. In fact, the benefit of using these apps is that many can sync with your bank and credit card accounts, giving you a clear idea of where your money is going.
Excessive spending could prevent you from reaching your goals and even put you in debt. In times like these, when so many day-to-day expenses cost more, it’s more important than ever to stick to a budget and take control of your financial behavior.
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