Overspending: An All Too Common Financial Mistake

Have you ever written a check for something that you knew you didn't have the money for? People do that more than you think. They play the game of "robbing Peter to pay Paul". This is a common practice that can lead to debt and bad money management.

Accepting a job means you will either receive a salary or be paid for work hourly. Either way, the exact amount of your paycheck can be affected because of raises, bonuses, or varying the number or hours you work each week, but most people are paid the same amount on a regular basis. Unfortunately, many people spend more than they earn on a regular basis.

Many such individuals are tricked by "buy now, pay later" offers. When people looking to buy something will not have to pay anything for two years, they are often blind to the dangers inherent in such financial arrangements. Furniture stores offering such deals often get people who only wanted to buy a bed to leave the store purchasing complete bedroom sets instead.

Keep in mind, though, that if you could not afford to buy the bed you wanted to look for, buying even more expensive bedroom furniture really does not make a lot of sense. Not having to pay for two years is no guarantee that you will have the money you need to pay for your furniture then either.

Credit cards can trick inexperienced card holders as well. Some people think that, although they don't have the money they need to make a certain purchase at the moment, they will have it by the time their monthly credit card statement arrives. Without planning such expenses into the budget, however, it will be very difficult to come up with the money at the end of the month. This could lead to leaving a running balance on your credit card that will incur interest rates until it is paid off.

We have to learn to be financially responsible or the debt situation will worsen. More people will file for bankruptcy or pay credit counselors to fix the debt problem. While these options are available to help those who have gotten deep into debt find their way out, far too few people take advantage of the help that is offered.

Carrying a certain amount of debt has become a status symbol. Everyone else has debt so why shouldn't I? People are not pressed to get rid of their debt. As long as they can pay minimum balances it doesn't seem to matter that it will take five years and several hundred more dollars to pay off a credit card.

As long as there is a credit company or store willing to extend more credit, the problem of overspending will continue. How we handle money affects the next generation of consumers. They learn from watching us. What are we teaching them?

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