The danger of overspending


WHY are we sinking in a sea of debt? Is it because we spend too much at the pub, buy clothes we don’t need, or purchase a new car when we can make do with the old? More likely than not, working adults tend to blame the demands of their social lives for getting into debt. When you prepare to go out with your friends and family, it may be good to have a sort of “mental cap” how much you would like to spend for the day. This will help you to plan where you go and what you would like to do after that makan (meal).

The issue is that, there may be that fear of appearing tight or stingy in front of your friends and acquaintances. It is this perception that fuel overspending. When you dine out with a group and the bill is split, some may have to pay more and others less because of the price differential in what they ordered. Or they may have ordered two rounds of beer while you only had one. In order to appear generous, you may overlook the matter and split the bill evenly.

Lack of self-control is another reason for “social debt”. This happens at meals and when out shopping with your buddies who may egg you on to buy “that lovely dress which is made just for you”. And you get carried away and overspend. At the end of the day, you are the one who is going to pay your bills, not your friends.

But it is not just pubs, a fancy restaurant and that new dress that is getting you into debt. We get into debts when we take a holiday we can ill-afford. Because we have worked so hard for half the year, we think we deserve a holiday but the fact is, we may not be able to afford to go abroad. Holidaying locally instead of taking a trip to the United States will still give you the rest you crave for.Some of us may need to learn to say “no” to drinks, meals and holidays that break our budget.

Rule 1: Take action, do not depend on your parents to help you. You are a working adult. Control your spending. Instead of spending more, cut your debt burden. Saying “no” can be empowering, especially when you see your bank balance grow.

Rule 2: Keep a little notebook and total up your spending at the end of the day, week and month. That may prevent you from spending beyond your means. Spend on things/services that you need, not what you want. Spend on things that are of value, not a frivoulous purchase. Don’t try to please that pretty sales girl. It’s your money that you are spending.

Rule 3: Be honest about how much money you actually have. This is absolutely crucial. Don’t try to keep up with the Joneses or show off, or to make yourself look good. At the end of the day, you are the one who is going to suffer. Why bother trying to impress people who don’t care a jot for you?

Rule 4: Don’t be swayed by peer pressure. Real friends consider your welfare. Ask yourself: If you are broke, will these same friends help you out? How much you have in your bank account is within your control and yours only. Seriously, if you are honest with a friend about why you can’t afford to spend money on something and you still find yourself being put under pressure, it may be time to have heart-to-heart talk with them, or even rethink the friendship. Real friends will not pressure you to do something you really can’t afford.

The Chinese believe that within each of us, there is this desire to spend and keep up with the Joneses. It is something that is innate within each of us, that it is part and parcel of being human, this urge to impress. This desire to show off is present in a larger degree in some people because of pride, and less in others. We judge others by the car they drive, the clothes they wear and the house they live in. Do not be ashamed of what you have and you will not be pressured to flaunt what you do not have.

As we become wealthier, we buy a better car or a bigger house. The trouble is, all of us tend to think comparatively. As you become even more wealthy, you want a better car, and house, but you are not happier or more contented than before because you still may not have the nicest car among your friends.

There are positive outcomes of comparing and competing. You can compete to become healthier, score better grades, be more educated, or be more skillful in what you do. But when it comes to consumer goods and services, keeping up with the Joneses is not going to get you anywhere but in more debt. So forget about fast cars, that fancy holiday or meal. This thing about living beyond one’s means is dangerous. It will not improve your self-esteem, but is self-defeating.

money