Addicted to Spending? Here’s What to Do

Has your spending gotten a bit out of control? Over half of Americans today say they live paycheck to paycheck and would struggle to pay for an unexpected but important expense. Yet we live in a society that makes it all too easy to overspend.

For one thing, overspending on one’s credit card is the norm in this country. National credit card debt hit $1 trillion for the first time in 2018. And the growth of online shopping hasn’t helped that trend. One problem is that credit card debt can become a very difficult situation to end as interest rates and fees become harder and harder to pay off. Pretty soon you can spend more of your hard-earned dollars on interest than on the items you purchased.

If you tend to overspend, here are some practical ways to start dealing with your problem, for once and for all:

Understand What Makes You a Spending Addict – And Why It’s a Problem

Enjoying a new purchase now and then is normal and certainly doesn’t indicate there’s something wrong with you. But if you struggle with an unhealthy or compulsive impulse to buy things, you likely suffer from shopping addiction. In a previous blog on the topic, we outlined more specifically what makes a person a shopaholic. Here are four of the most common signs you have a spending problem:

  1. You find spending difficult to control.
  2. You often buy things you don’t need.
  3. You’re bogged down by consumer debt.
  4. Financial penalties like over-limit fees hold you back.

Consider Financial Counseling or Other Forms of Professional and Personal Help

Consider for a moment how compulsive gambling is treated. It typically requires more than one approach, including some form of therapy, financial counseling, and possibly a support group or 12-step program. Depending on the situation, opening up to your family and other self-help techniques can also help individuals curb their over-spending habits.

Come Clean to Family and Friends

If you share finances with a significant other – particularly if there are children involved – then it’s important to open up to that person about your problem. Chances are they already know about it. Money is a common source of anxiety, even in households where none of the family members have a spending addiction. A conversation might be the start to smarter habits at home, as well as the path toward healthier relationships.

Create a Better Budgeting System – and Stick to It

How do you typically budget out your monthly and annual expenses? The more work you put into your system, the more you will remember what steps you need to take to stick to it.

If you’re a visual person, create a spreadsheet indicating how much money comes in each month and how much goes out. This will likely include:

  • Income from every source
  • Bills
  • Groceries
  • Gas
  • Clothing
  • Household items
  • Entertainment estimates

With your typical expenses laid out in front of you, you’ll get a concrete sense of where your money is going. Developing a detailed budget can be an eye opener for someone who has been overspending without quite realizing they had a problem.

Deal with Your Debt Head On

  1. How much more are you spending than you make?
  2. How much current debt do you owe?
  3. To whom do you owe money – and what are the payment terms for each source?

Chances are, you’ll need to do a bit of homework to determine how long it will take you to pay down all of your debt. Don’t get discouraged! There may be assistance available in some of these areas, such as debt settlement to renegotiate the terms of your agreement. Once you know how much money is coming in, what your expenses are and how much you owe, you will be on a better track to becoming truly debt-free someday.

Consider Getting a Prepaid Credit Card from Your Local Currency Exchange

Credit cards are bad news for spending addicts. The good thing about a prepaid debit card – especially for compulsive spenders! – is that it provides the convenience of plastic without easy access to overspending. They are also a safe alternative for people without bank accounts.

Stop by any CCEA to load your new prepaid debit card with any amount of money you need to make purchases. And if you slip up, don’t give up! Your nearby Community Currency Exchange (CCEA) offers many convenient services related to transportation, auto needs and even small businesses. Check out your nearest location to get on a healthier financial path today.

A woman laying on her sofa while shopping online.

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