With the advent of high-speed internet, shopping has become both easy and enjoyable. To buy your favorite pair of jeans or an electronic item, you no more need to go out to a brick and mortar store. The mental effort needed to purchase a particular item is way less compared to what it was a few decades ago.
Naturally, this has lead to overspending. A stat says that 4 in 10 consumers in the United States are worried that they will overspend this festive season. Before you go ahead and spend more than you can afford to, read the following points carefully.
Here Are the 4 Scariest Consequences of Overspending
1) You won’t be able to save enough for retirement
By spending more than you can afford at a young age, you won’t be able to save enough for your twilight years. It is always a good idea to save 20-25 percent more than the estimated cost of retirement. An unexpected expense can wipe out all your savings. Hence, stop overspending today and work to secure your future. There is no point in living a YOLO life when you know it will put you in financial trouble later.
2) You will neglect the benefits of insurance
You might have heard some people deny the fact that an insurance policy (be it a standard life or health insurance) is of utmost importance. Not only for you but your family can also live their life knowing that they are medically covered. If an unexpected event is to happen, your insurance company will bail you are your family member out of trouble. Overspending leads to a false belief that insurance is a scam and is not needed.
3) You will get charged by overdraft fees
You can only withdraw the amount you have from your bank account. Trying to withdraw more than the current balance will land you into more trouble than you can imagine. Not only an overdraft fee is charged but the incident is also reported to the credit agencies. As you go on withdrawing more than you have, your credit score goes on pummeling. The consequences of a credit score hit are quite well-known.
4) Overspending will ruin your relationships
Unless you live alone, overspending will create a conflict with your partner or family. No one wants to spend time or live with a person who cannot manage their money sensibly. Overspending is not only risky for you but it also sends a signal to others that you cannot be trusted, in general. So, how do you plan to maintain your relations or keep the people that you have now, further in your life?
By understanding how money works and jotting down a spending plan for the future, you can put a halt on your spending right away. Maybe there is an underlying cause behind your overspending habits. Are you throwing money away just fill an emotional void? Do you have clear answers to such important questions?