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    8 Signs You're Overspending And How To Stop

    Overspending is one of the most common financial bad habits that lead an individual to a distressed economic situation. Those who overspend find they are constantly behind on payments, never have enough money to cover expenses, and have nothing set aside for their future. 

    Here we will look at the eight most evident signs of overspending and how to recognize them.

    You Max Out Your Cards

    Maxed out credit cards are one of the most obvious signs of overspending. It means that one is spending beyond their means and constantly has to draw from their credit to facilitate their money habits. 

    Maxed out credit cards can lead to large interest charges and make it difficult to get out from under the shadow of debt. This is especially true for those who already have a high debt to income ratio or unstable financial situation. 

    You Make Minimum Payments Only

    If only the minimum credit card payments can be made, it means the person's financial resources are spread too thin and is a clear indication of overspending. 

    Paying the minimum balance on a credit card barely has any effect on the principal balance, with the vast majority of the payment going to interest. By making just the minimum payment, it can take over a decade in some cases to pay off the balance.

    You’re Spending More Than You Bring In

    General wisdom states that it makes no difference the amount of money one makes if they are unable to exercise intelligent spending habits. 

    If an individual is constantly needing to tap into their credit resources to cover essential expenditures it means there are major problems with their budget and spending habits.

    You Indulge

    Everyone needs to have some allowance in their budget for entertainment spending. How much depends on the individual, their expenses, and their monthly income. Unfortunately, many people overindulge in their spending to a point where they have trouble paying their bills, debt obligations, and day-to-day expenses. 

    If a person is finding themselves constantly drawing from their credit accounts to pay their basic expenses, it is likely a symptom of overindulgent spending.

    The More You Make, The More You Spend

    It is natural for one’s expenses to rise with their income. As one begins to enjoy increased financial resources they also want to enjoy an increased quality of life. This could mean a nicer apartment, better car, or healthier food. 

    While this is all fine, increased financial resources should also mean the lowering of any debt and increased savings.

    If one’s financial situation does not improve with increased access to economic resources, it usually means there is an overspending issue.

    Buying A House Too Early, Or That Is Above Your Means

    Most everyone wants to one day own a home, and this desire may compel people to take out a mortgage before they are ready. Some people may also decide to purchase a home that is outside of their means to pay off. 

    Taking on debt commitments that are outside of one’s ability to consistently pay is another form of overspending.

    You Feel That You're Stuck In Spending Habits

    It is common for overspenders to feel as if they are stuck in a set of spending habits, which they usually are. 

    Breaking free of these poor money habits involves a paradigm change in regards to how one thinks about money.

    A good way to start is by using the snowflake method to begin paying down a particular debt.

    You Don't Stick To Your Own Budget

    Drafting up a budget is one thing, but sticking to it is something entirely different. People who have issues with overspending almost always have problems sticking to their budget.

    How To Stop Overspending

    • Analyze Spending Habits And Create A Budget: Creating an honest and realistic budget in a necessary, but insufficient, condition to keep spending under check. One must also analyze what spending tendencies they have. Identifying areas where money is needlessly spent is of great importance.
    • Set Short Term Goals: Those with bad spending habits are unlikely to complete long-term financial goals. Short-term goals are much more likely to be completed and lead to success. Listed below are some examples of short-term financial goals.
      • Weekly deposit into a savings account
      • Biweekly debt payment
      • Save an emergency fund of $1500
      • Don’t eat out for two weeks
    • Conduct Day-To-Day Spending With Cash: Contactless payment systems have made it easier than ever to spend money on a whim. This leads to people spending more money than they would like to since one does not see the money leaving their account. Setting aside a fixed amount of spending cash for the month allows people to easily keep track of how much they are spending.


    Overspending is a major problem for anyone trying to remove themselves from debt.

    It makes it nearly impossible to make meaningful payments and most people end up drawing from their available credit to support their spending habits.

    Ultimately, controlling overspending is a critical function of exiting from debt.