Spending money can’t be avoided. You NEED to pay for food, clothes, housing, utilities…and the list goes on. What happens though when you start spending more than you have? It’s called overextending yourself or living above your means, and it’s not uncommon.
A 2017 study by CareerBuilder.com said that nearly 8 in 10 American workers live paycheck to paycheck, and a CreditCards.com survey shows that 47% of Americans have credit card debt. There’s no doubt that a lot of people are spending money they don’t have. Luckily, if you or a loved one are one of those people who overextend themselves financially, there are ways to get out of the overspending habit.
Budgeting is an important part of any successful financial plan. Start with basic living necessities, like food, housing, transportation, insurance, etc., then subtract that from your monthly income. Consider putting some of the remaining money away each month for saving, retirement, home repairs, or other goals. The idea isn’t to eliminate fun from your life but to arrive at an amount that provides for enjoyment today and peace of mind for the future.
Identify all your income sources and assets, like savings accounts, that you can utilize until you can resume working or increase your hours. Review your expenses and eliminate all the things you can live without. Reduce essential expenses and talk to SMW 104 Federal Credit Union about consolidating loans or lowering interest rates.
If you’re struggling to pay your bills even after eliminating and reducing expenses, prioritizing bill payments in this order is a good idea:
Many companies and lenders offer flexible payment options. If you find yourself in need of an extension, contact the company or creditor before your bill is due and ask about what options you may have.
If overspending by a spouse or family member is an issue, it’s important to work together to solve the problem in a supportive and understanding manner. Often, people who make unwise spending decisions feel guilty about their choices. Staying positive and working together can help to give the overspender a can-do mindset and avoid any defensiveness.
Don’t hesitate to contact us today with any questions. We’re here for you!