Counting Pennies

Why do you overspend? We all have our weak areas when it comes to our budgets. For some people, it’s about bad habits (smoking), luxuries (Prada shoes rather than Payless) or bad organization (buying a second pair of scissors because you can’t find the first one). For others, like me, it’s about emotions.

Talk to me on a happy day and my budget will be flawless –I’ll spend hours actually planning ways to pay less for pretty much everything. On a bad day? I’ll probably be out shopping for things I REALLY don’t need.

While retail therapy may seem like an innocent escape, it can turn into a major problem if you’re doing it so often that it starts to make a dent in your budget. According to Nancy Smith, an expert on debt consolidation, a lot of people are quite compulsive where shopping is concerned. “We buy things out of impulse not out of necessity, and that is the most common mistake a lot of us make when shopping,” says Smith.

Need some help identifying if your habits are out of control? Here are red flags:

• Using too many credit cards too frequently, especially for non-essential purchases
• Overdrafting your checking account more than once
• Buying without comparing prices
• Not knowing why you bought a specific product as soon as you get home
• Buying a magazine on impulse and then realizing you don’t have enough to pay the electric bill
• Buying something because your neighbor (or your sister or your friend) has it

If you find yourself overspending often and much, sit down and reevaluate your commitment. You may need to figure out a different budget or rethink your priorities.