Money at 30: Is it Time for a Financial Intervention?
Overspending is an addiction. Unfortunately, no matter how thrifty and frugal one may be, there’s always room for relapse. As someone who’s made their fair share of financial mistakes in the past, I know how easy it can be to slip back into your old ways and, in some cases, ruin much of the progress you had made.
Luckily there are signs that will inform you that you’re headed down the wrong path — the key is just to look for them. So if you’ve dealt with overspending in the past and want to keep on the financial straight and narrow, here are a few hints that it may be time for an intervention:
Are your monthly credit card balances rising?
We all have good credit card months and bad ones. However, if you’re noticing a trend of balance inching higher and higher, it could be a sign that you’ve been indulging a little too much. Even if you’re still managing to keep up, it’s probably a good idea to assess what’s causing the increase and rein it in.
What’s even worse than spotting the trend as its happening is being surprised by a big balance. If you’re taken aback by the intimidating size of your bill it probably means you need to be paying closer attention to your spending before it gets out of hand. On the bright side, a shocking credit card statement could provide you the financial wake-up call you need.
Are you “borrowing” from your savings?
In my less financial mature days, I did a classic move where I would contribute to my savings account regularly, only to grab that cash right back when my checking account was running a little low. Sure I told myself that I’d replace it and then some in the coming days, but that rarely (if ever) happened. Unfortunately was is kind of behavior that landed me in trouble when unexpected but important expenses cropped up and I didn’t have an extra penny to my name.
Yes, part of the point of saving is to give yourself a safety net such as with a rainy day fund. However, if you’re compromising what qualifies as an “emergency” and dipping into your savings with greater frequency, you’re likely doing yourself a disservice. Instead you should assess your spending and evaluate where the money you should be sending to savings is really going.
Are you honestly sticking to your budget?
Well, are you? Becuase, if you truly are sticking to your budget, the above two scenarios shouldn’t be happening. Perhaps some sober reflection on your budget and financial goals is needed. From there you may want to even build a new budget from scratch or adapt your old one to better meet your needs.
Let’s be honest: being financial responsible 100% of the time is near impossible. In fact we’re all destined to make mistakes, especially when it comes to overspending. However, by recognizing the warning signs of your backslide and making efforts to reverse course, you can help ensure your place aboard the thrifty wagon.