The Anatomy Of An Over-Spender
Spending habits can make or break your 20s financially. Overspending is a big part of what has gotten most Americans into the current dire economic circumstances that we now are faced with. Let’s look at some of the driving forces and factors that create an over-spender.
Keeping Up With The Joneses
This is the old attitude that makes you want to continue to buy things that the people around you buy just for the sake of “keeping up”. This often drives people to buy things they can’t afford such as cars, boats, flat panel TVs, laptops, phones, etc.
Never before have more people bought more homes than in the past 10 years. Buying real estate became a no-brainer all of a sudden in our society due to lower lending standards and a widely adopted idea that renting was the equivalent of throwing money away. This is completely untrue. Renting is a great financial decision if it allows you to spend not much money on your cost of living and allows you to put away a great deal of money.
Don’t buy into the fact that you need to buy a home as soon as possible. If circumstances warrant a purchase (like me, married with a kid on the way) then weigh your options and consider a home purchase; otherwise, save your money, rent for cheap and get ahead financially in your 20s.
Being A Marketer’s Dream
Young people especially, can easily fall into the trap of being things because we are told to buy them. How can you resist the amazing Apple advertisements and not buy an iPhone? That thing is so cool!
The other thing is falling victim to “great deals”. With retailers struggling, prices are going down on a great deal of items. If you are tight on money, it’s still not a great deal. Stop buying sale items and put money away into savings.
Get Control Of Your Spending
Again, your spending habits can make or break your 20s financially. You can buy a bunch of crap that will be useless in a few years and have a lot of credit card debt to show for it or you can be smart about your spending and enter your 30s with some nice net worth. I recommend you control your spending and boost your savings and investments. Nothing will make you happier down the road!