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3 Reasons You Overspend

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Have you ever set a financial goal only to find that your actual spending significantly surpassed your budget? When you have the best of intentions to create financial health, why is it so darn easy to sabotage your progress? As a female financial advisor and confirmed personal finance junkie, here are three factors that I think contribute to this (all too common) phenomenon.

1. We are bombarded 24/7/365 by media images of "average lifestyles" that are anything but. I love watching police and medical dramas on TV. But have you ever noticed how it appears that each policewoman and nurse has had a fresh mani/pedi and professional blow out right before arriving at her 7 a.m. shift? I didn't have hair that frizz-free and skin that flawless on my wedding day, let alone before heading out for a day at work. It would be interesting to add up the costs of what it would take to replicate look of these "average" lives. My hunch is that the costs would equate to a total price tag that was 20% more than those positions pay. With unrealistic comparison like that, is it any wonder we overspend?

2. Most of us were never taught what "healthy spending" looks like -- so we don't realize how much we are over spending relative to our incomes. I've yet to meet a single person who sat down and said, "Hmmm, how can I blow my budget?" The much more common response is a shocked, "But I was doing the same thing as everyone else!" Frequent readers of this blog know my favorite budgeting rule of thumb comes from Elizabeth and Amelia Warren's book, All Your Worth. It's 50/30/20. That's the percentages of your take-home pay that would go towards needs, wants and savings in a "balanced spending" plan.

3. Social media has created an alternative universe where we can "stage" our lives and then share those images the same way a magazine might stage a layout. So yes, a photo of an amazing brioche French toast with crème fraiche and Vermont maple syrup is no longer just a meal. It's a statement on Who. You. Are. In short, the internet has super-sized and turbocharged the long-standing human desire to keep up with the Joneses. In many cases, it has led us to view our lives as if we, too, are watching them through a lens. The things we do -- the money we spend, the experiences we have -- become the way we "focus" that lens to create the image of ourselves we'd like others to see.

And if those aren't reason enough, in today's modern life we are So. Very. Busy. Having people over to our homes requires that we shop, clean, prepare -- so often, it's much easier to just go out, which can lead to... you guessed it: overspending.

Ultimately, our vulnerability to overspending strikes at the heart of our sense of worth and identity. In order to protect our net worth, we have to learn how to unconditionally value ourselves, instead of buying into the mass media driven notion that, to improve our lives, we must accumulate more "stuff." Because usually it is... just stuff.
[This post originally appeared at MoneyZen.com. Photo credit Louis Leray]. For more MoneyZen in your life, follow Manisha on Twitter at @ManishaThakor, on Facebook at /ManishaThakor, or sign up to receive Manisha's MoneyZen blog via email by clicking here.