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My Reckless Spending Leaves Me No Savings, What Do I Do?

I am 29 years old. I have a full time job that pays well. I have a habit of over-spending that has kept me from having a good savings.

I am getting very concerned that I can't save any money for the future, and sometimes I have credit debts as well. I tried many ways to resist the urges, but the temptation is everywhere, online and in store, especially with all the sales going on. I just seem not to be able to control myself. I realized this is a problem I need to fix but how?


A frustrated spender


Dear frustrated spender,

First of all, I can't help but to let you know that how proud I am for you to identify this issue and making effort to fix it. This is the first step that you need to make the change. I am glad that you recognize how toxic this habit is and how it has negatively impacted your financial goals. 

Before we dive into how to self control over spend, let's take a look at factors in driving our spending habits. 

A spending decision is a combination of two major factors, financial budget and emotions. 

We typically know that we have a budget to follow or having a financial goal to achieve, but emotion plays a role in making spontaneous purchase decision. The short lived happiness derived from this quick spend can bring a temporary satisfaction (a.k.a. shopping therapy), but soon it is replaced by the anxiety and stress of mismanagement on our finances. 

This common financial challenge, overspending, can be controlled with a combination of money strategy and emotion understanding. 

Over spend is defined as spending beyond means. More than one in four adults could not pay their bills in full that month or were one $400 financial setback away from being unable to pay.

This constant money stress, along with other possible stress, i.e. peer pressure, relationship, job security etc. can sometime bring in a flee strategy, ignoring the spending and let situation be out of control. 

The good news here is that once we understand what is driving your spending habit, we can form a strategy to eliminate this habit. Since you have a great job with steady pay, it is the matter of planning. Here is a few steps I would like to recommend:

Set up an auto-withdraw to your 401K and retirement account

Set up an auto-withdraw to your brokerage account. If you have not explored investment world, this is the time. We live in a world that, if we don't invest, inflation will be eating your fortune. While I specialize beginner investors, you can also make some safe investment to keep your money grow at the market. 

Both above two approach is to control the access of your money. "out of sight, out of mind" can go a long way to your future.

Learning investment will fundamentally change your perception to money. The compounding effect of money, the sense of accomplishment with you can make money growth will start bringing the joy more than a temporary purchase. You will look at money from different light and the benefit? Your emotion and happiness shift to making money instead of spending money. 

Set a goal for your financials. Be realistic, but be specific. These goals will help to bring more mindfulness in decision making. 

Create a list of items that fit you (not just chasing the trend) and speak for your style. When you reach each step towards your goal, reward yourself with the item on this list. 
These steps can get you started on money management. Financial security you create predicts overall quality of life and well-being. You are on the right path by asking this question, now let's do it. 


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