This is a great piece on overspending….a subject, which you know, is pretty close to my heart!

Whilst this is written from an American perspective, I think that, apart from the numbers the story is pretty much the same, no matter where you are in the world!

I had lunch with a friend, and fellow former overspender, today and we discussed the “now” generation. In our parents’ day ( and I’m a generation above her) they saved for what they needed or wanted, and the range they had to choose from, was much more limited than it is today. I think their expectations were much lower than ours are too. I hasten to add that I think the “Y” generation have much higher expectations and the need for even greater immediacy, than ever before.

What are your thoughts on this?I’d particularly love to hear from you if you disagree! Let’s get the discussion happening!

Or have you had any consequences of overspending, which Ramona hasn’t thought of?

 

The Consequences Of Overspending — RamonaCreel.com.

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Have you ever opened your credit card bill and been absolutely shocked at how much it is? Worse still, have you ever been too scared to open it, knowing you were going to be shocked? How about going into your wallet and going “where did that $100/$200/$300 etc go?  We call this being in the “money fog”! Essentially not having any clue how much money we are spending or have spent.

The money fog is almost always worse when we’re using credit cards, because the spending is often unconscious. In other words, you don’t really have to think about it, you just hand over your card without even considering what the balance already is. Provided you’re not at your limit you can easily do a day of retail therapy, or compulsive shopping, without giving the total amount spent another thought! You can just shop until you drop! Whilst you can also be in the money fog when using cash or debit cards, reality is closer at hand! You will either run out of money, need another trip to the money machine, or your debit card or EFT POS card will be rejected. Your spending therefore has to be, if not completely , at least partially, conscious.

Conscious spending is being aware of, not only how much you’re spending, but also being aware of what you’re buying! Do you really need it, or have you just seen it and want it, RIGHT NOW?

I know that when I was at the peak of my overspending, I could have a day out shopping without giving a thought to how much it was costing, or if I really needed what I was buying. As I was a very regular Internet banker ( I had to be, to keep juggling my money!) my shocks at how much I’d spent came pretty early on!  The unneeded purchases were often obvious very early on too! I might have “needed” a painting but did I need ten?

As the reasons you overspend, or shop compulsively, are many and, often, complex there isn’t a quick cure. However, if you only use cash or debit cards, the harm you can do is minimised. The other key is tracking your spending, that is, write every single cent you spend down.

If you are concerned about your spending or any of this, please seek help. The Financial Recovery℠ Institute has a list of counselors http://www.financialrecovery.com/?p=find-by-area. If you cannot find one in your area I, and a lot of my colleagues, offer counseling by phone or via Skype.

Do you have a story of being too scared to open your credit card bill? Please share it with us below in the comments section.

Don’t you love to see things, reduced in price, just when you need or planned to buy them? This is a true bargain.

But what about the stuff you didn’t plan to buy? You know the ones… “It was such a bargain, I couldn’t  pass it up”, “but it was on sale”. I’ve done it more often than I’d care to admit and justified it. I’m sure, many of you have too. We’re lured into the purchase by the sale signs!

However, there is a saying:

“You can’t have too much of what you don’t need”.  In other words if you don’t need it, you probably shouldn’t be buying it, no matter how much of a bargain it is!

This comes into play particularly, when things are on sale. Retailers know that most of us are attracted to bargains; valued items which we see reduced to “sale price”.(That is the price which the retailer knows will get it moving out the door, as fast as possible!) This appeals to our psychological side. We get an extra emotional “hit” when we think we are getting something cheaply. It makes us feel good. For those of us who use shopping or buying “stuff” to fill some unmet emotional need, this is mana from heaven! Not only can we buy it, but maybe we could  buy two (for the price of one!) or buy this AND something else (two hits for our buck!).

You may have an earlier post of mine http://wp.me/pDpjD-10 “Do you REALLY need it or just want it?”, which tackles this issue in more depth. Suffice to say, it is very important that we differentiate between our needs and wants when making buying decisions. I know that I used to buy things and tell myself I “needed” them; the reality was that I just, at that moment, “wanted” them. Sometimes I’d get them home and know almost immediately that I’d never wear that colour, style or whatever! I was purely lured into the purchase by the item being on sale, or just my need to buy something to satisfy some other unmet, often unrecognised, need. The retailer had won again.

So, if you really do NEED something and find it on sale, well done, you’ve truly got a bargain! However, if you have just bought something because it was on sale, you could have saved yourself more money, by simply not buying it!

I’d love to hear your stories about some real and imagined bargains you’ve got, in the comments below.

In my post on Monday, I made the statement:- “Compulsive shopping is virtually synonymous with overspending or overshopping; so I use the terms interchangeably here.”

Yesterday, I was talking with another Financial RecoverySM counsellor, Danielle Ray, (www.integrativefinancialcounseling.com) and she challenged this statement. Danielle said that people could overspend, unconsciously; but without the compulsion and need to shop, that characterises compulsive shoppers. She’s right and so I retract that statement!

I think that part of my “confusion” was that, as an overspender myself, whilst most of it was unconscious,( not being aware of how much money I had, nor how much I had spent) occasionally there were elements of compulsion as well. When I decided that I needed (or was that wanted? – watch for a future blog on this!)something, I could be compulsive in my pursuit of it. I would drive all over town if needbe, that very day, to purchase it. The “having to have it, and have it now” syndrome!

This has, of course, now been made so much easier for us all and, dare I say, more dangerous, with the advent of online shopping. We no longer need to put any pause between the thought and action, in this case shopping, before the transaction is complete. For this reason, I also advise my clients to use a debit card and not a credit card at all times. (I do this myself although have a CC which I use for business, but very seldom.) This means that they can still send flowers on Mother’s Day and still order tickets on the internet for concerts and movies, but all the money comes immediately out of their current account. Therefore, the shopping has to be all that more conscious, or if it isn’t, the consequences are much more immediate!

So, thank you Danielle, for making me think more clearly about this.

Shop 'til you drop!I have been promising a blog on compulsive shopping so, here goes. Compulsive shopping is virtually synonymous with overspending or overshopping; so I use the terms interchangeably here.

We’ve all laughed when someone says they’ve done some retail therapy or, they’ve shopped ’til they dropped! Let’s face it most of us have done it at one time or another, and no harm was done. However, for others, and for many years I was amongst them, it isn’t a laughing matter and harm is, or was done.

In her book, “To Buy or Not to Buy – Why we Overshop and How to Stop” April Lane Benson, a New York psychologist, specialising in the treatment of compulsive buying, says “……when we overshop, though we often don’t realize it, we are trying to fill emotional needs with material goods.” She goes on to say that:- “The conclusion is now inescapable: far from trivial, overshopping is an important source of emotional, social, occupational, financial and spiritual misery for a great many individuals and families.”

Mine was mostly financial although the sleepless nights, worrying how I was going to be able to pay my bills, took their physical toll at times.

So, the next time you laugh about someone’s retail therapy, just check in with yourself about whether this might, in actual fact, be something more. There is help available.