How You Became a Spendthrift and What You Can Do About It?
When it comes to spending, majority of the people become spendthrifts and repeat the same behavior facing difficulty with increase in risk of debt which in turn increases their mental anxiety. A spendthrift knowingly or unknowingly wastes his money towards his excessive/frivolous spending habits and faces unexpected financial hardships.
Moreover, in this materialistic world with the present culture of dissipated spending and consumption, people are being habituated to repeat some money mistakes in their personal finance. Here in this article, we figured out some common money mistakes often repeated by spendthrifts. If you are one of them, you need to overcome your mistakes in order to curb your over-spending and shopping addiction.
Mistake #1: Excessive Spending Irrespective of Need
Some people spend money which they haven’t even earned. The excessive and misuse of credit cards has left millions of people in a debt-trap. This is because, very large number of people today, just want to live beyond their means. In such cases, though it is painful to get your finances on track, you need to make wise spending. You must not be over ambitious at the cost of your lifestyle and happiness. If you earn a good income and lead a life with excessive debt, then what is the point of earning so well? So, start living without taking debt to lead a financially healthy life.
Mistake #2: Affording a Purchase Without Payment
Affordability, indicates that you would be able to bear the cost. It is a sense of tolerating the financial burden. But remember, being able to make an installment payment on purchase is not the same as being able to afford the purchase. So, avoid getting into debt for purchasing material things like gadgets, car and latest fads. The sure way to purchase items is to save money and purchase them whenever they are actually required.
Mistake #3: Impulsive Spending
Impulsive spending is a type of shopping addiction, which makes people buy something when they feel bored, anxious and depressed. The impulse buyers unnecessarily fall into debt by spending their borrowed money on things which are not needed. If you are facing such type of addiction, don’t go for shopping without making a clear plan of what you need and what you don’t need.
Mistake #4: Never Research Before Purchase
Some people purchase things without researching. Researching allows you to evaluate the long term value of the purchase and also to check whether it fits the need. If you are purchasing an in-expensive item, then researching is really not required. But in case of expensive things like furniture, gadgets, garments, jewelry, car, etc., you need to invest some time in research for the long term usage of the product/thing. You need to look for the things that are functional as well as cost-effective.
Mistake #5: Being Swayed By Sales Promotions
Big shopping malls and online stores try to attract people by heavy discount deals. They make many techniques and tricks to get us to buy goods that we don’t really need. Never get excited over the offers like ‘buy 1 get 3 free’ or 50% sales offer. They just make people to accumulate things which they are never going to use.
If you are making even some of the above money spending mistakes, realize that you are in a financial danger zone. These habits can lead to lot of hardships for the spendthrift.
However, it is required for you to understand that, personal finance is neither about compromising on all your dreams nor about spending expensively on something you don’t need. It is about knowing what you need and what you don’t need. It is a good idea to make smart choices on how you spend your money.