How To Tell If You’re Overspending: 5 Key Signs

Photo of a stressed man going trough his financials problems,he is sitting in kitchen late at night checking and paying bills.
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If you think you might be overspending, you’re not alone. Many people struggle with keeping their spending habits within their budget.

In fact, according to a 2022 survey conducted by Slickdeals, 32% of respondents said that spending too much money was one of their top regrets associated with online shopping.

Chances are, if you think you’re overspending, that probably is the case. Keep reading to find out if you are guilty of living above your means.

5 Signs You’re Overspending

Here are five things to consider to help you determine whether you’re overspending.

1. You’re Not Saving Any Money

A clear sign of overspending, if you’re not putting any money in savings each month, you’re probably spending too much. Of course, there are always exceptions to this rule — i.e., if you’re barely earning a living wage — but generally speaking, you should be able to work at least a little bit of savings into your monthly budget.

2. You Have Credit Card Debt

When you don’t have the cash to pay for something, you use a credit card. Sky-high interest rates seriously increase the price of everything you purchase with your plastic, which keeps getting you deeper in debt.

In 2022, the average consumer credit card credit debt was $5,910, according to Experian. If this sounds familiar, it’s time to start focusing on paying off your credit cards, instead of relying on them to cover the costs you can’t.

3. You Can’t Pay Your Bills

If you’re unable to pay your bills, this is a clear sign your spending priorities aren’t in order. Maybe your living expenses are too high for your budget. Or perhaps you’re unable to pay your bills because you’re spending too much on extraneous expenses.

Make Your Money Work for You

Regardless, if you can’t pay your bills, something needs to change. Otherwise, you’re simply falling deeper into debt each month.

4. You Have No Available Cash

It’s one thing to have no cash in your wallet because you haven’t been to the ATM. However, it’s an entirely different story if you can’t take money out of your account because your balance is zero.

Using your credit card instead of cash and then paying the balance off in full at the end of the month is fine. What doesn’t work is shopping exclusively with a credit card because it’s the only way you can pay for anything.

5. You Shop in Secret

If you’ve stopped telling your spouse, family and friends about your purchases because they questioned your spending habits, consider this a sign. There’s no shame in spending within your means, so if you’ve decided to remain mum on your latest shopping finds, you probably know deep down that you’re spending too much.

What Causes Overspending?

It’s not the only reason for overspending, but a lack of budget is the main cause for doling out more than you’re bringing in. When you don’t actually know how much money you’re spending each month, it’s easy to go overboard.

Of course, simply having a budget won’t keep you from overspending. You also need to be able to resist any temptation to spend over your budget.

What is an example overspending? To leave no room for confusion, an example of overspending would be if you budgeted $50 for a dinner out, but ultimately spent $80.

What Is a Danger of Overspending?

Overspending can easily put you in debt. A few small, occasional slips likely won’t make a huge difference, but if this becomes a habit, you could seriously jeopardize your financial health.

Make Your Money Work for You

If you get to the point where overspending is your standard, you’ll need to rely on credit. As of April 17, the average credit card interest rate was 24.20%, according to Forbes Advisor.

This can cause you to rack up a serious amount of debt in a short time period. Once you get into this cycle, it can be hard to break free. The debt you accumulate can follow you for years to come.

How Do I Stop Overspending?

You’re tired of ending each month in the red, but you’re not sure how to make a possible change. Here are five tips to get you started.

Be Honest With Yourself

You can’t stop overspending if you can’t see that’s exactly what’s going on. Admitting to yourself that you have a bit of a spending problem isn’t always easy, but it’s necessary.

Realizing your habits need to change is the first step toward improving your financial health. When you’re honest with yourself, you’re able to move forward in a positive manner.

Create a Budget

It’s nearly impossible to avoid overspending without a budget. This will allow you to see how much money you’re bringing in each month and exactly where it’s going.

Setting spending limits on categories like dining out and shopping can help you start living within your means. This may be a tough adjustment at first, but you’ll quickly get used to it.

Find Ways To Save

Another big part of avoiding overspending is seeking out ways to cut back. For example, you might start making coffee at home instead of visiting your local cafe each morning.

On a larger scale, this could even mean swapping your expensive luxury apartment out for a cheaper one that’s still nice but offers fewer amenities. Making a combination of small and large changes can easily turn your lifestyle from unaffordable to perfectly budget-friendly.

Stop Using Credit Cards

If you’ve racked up credit card debt, the interest alone can take years to pay off. Try to quit cold turkey by not paying with plastic at all.

When you pay exclusively with cash, you’re forced to live within your means. Use all the money you save to start paying off your credit card debt.

Establish a Shopping Waiting Period

Impulse shopping can add up fast. If you’re guilty of this habit, try to break it by making yourself think about an item for at least 24 hours before making a purchase.

Chances are, most of the items put on your “wait list” will be removed. This will allow you to feel confident those you do end up buying are genuinely good choices.

Final Take

Now that you know how to tell if you’re overspending, you have the knowledge needed to assess your financial situation. Don’t panic if you determine you are indeed spending too much each month.

Cutting expenses might be challenging at first, but it will ultimately be a major stress reliever. When you start living within your means, your financial health will improve, which will be an amazing feeling.

Our in-house research team and on-site financial experts work together to create content that’s accurate, impartial, and up to date. We fact-check every single statistic, quote and fact using trusted primary resources to make sure the information we provide is correct. You can learn more about GOBankingRates’ processes and standards in our editorial policy.


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