Addressing Overspending

We teamed up with Frank Conway financial literacy expert of Moneywhizz to bring you this article.

We teamed up with Frank Conway financial literacy expert of Moneywhizz to bring you this article.*

What triggers overspending?

While we all should be familiar with the concept of spending more than our income, many may be less aware of the emotional triggers behind our overspending. Understanding how to manage these emotional triggers can help us to control spending more effectively.

Trigger 1 – Environment & Events

Some environments and events make it harder to resist spending. With many of us working from home during the COVID-19 situation we may be more inclined to browse and spend money online, especially when we can’t go to the shops.

Manage these emotional triggers by setting a spending limit before you shop. Write your limit on a yellow stickie and post it on your computer screen.

Trigger 2 – Stress

It’s not called retail therapy for nothing. We can sometimes overspend as a way of trying to relieve our feelings of boredom, depression or stress. But any immediate relief from this kind of therapy comes with a longer-term price tag.

Manage these emotional triggers by first becoming more aware of the link between how you feel and how much and how often you spend. Over time, establish more healthy ways to relieve your feelings. For example, alleviating stress through exercise, meditation, and diet.

Trigger 3 - Peer pressure

We all feel the pressure to be seen to be "keeping up with the Jones'" from time to time and that can cause us to spend beyond our means to look good to our peers. Unfortunately, the Jones’ don’t care that much about your financial wellbeing.

Establish a budget that will help you to meet your financial goals (not anyone else’s) and allow yourself a reasonable amount for spending regardless of the lifestyles of friends and family.

Trigger 4 – Denial

When your finances take a hit, you’ll almost certainly need to cut back on spending or find a way to earn more. Few people enjoy cutting back but some respond to their changed circumstances by denying that it is happening and simply carrying on. This rarely ends well.

The sooner you react to a dip in your finances, the sooner you’ll be able to manage the change. The easiest way to do this is by creating a budget based on your new income and outgoings then living within it.

*Bank of Ireland has teamed up with financial literacy expert Frank Conway to bring you this article. Views expressed are Frank Conway’s own and not necessarily the views of Bank of Ireland. This article is for information purposes only.
Bank of Ireland is regulated by the Central Bank of Ireland.
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