So what’s a person to do?
While there’s no magic wand we can wave to make things better, patience and time will be your best ally. In fact, the most important thing you can do is to get an attitude adjustment by acknowledging the problem. Delaying action is just another form of denial. Fretting and harping over the situation will only serve to add to an already stressful situation. Negativity is fueled by inaction, so get busy fixing the things you have control over and accepting those that you can’t. You’ll find, that as you make progress in changing your ways, your view of things will improve. As the battle begins to dissolve and turn into productive habits, not only will your life be easier but the lives of those around you will be better as well.
Of the two beasts battling it out, limited income may be the more difficult to overcome. It will require perseverance to improve your employment conditions by furthering your education to qualify for a higher position or to pound the pavement to find a new job. In either case, it probably won’t happen overnight, so you’ll need to learn to live within your means until it happens.
Poor Spending Habits
Here’s where you can make the most headway in the battle between limited income and poor spend. There’s nothing holding you back from learning new ways to manage your money and correcting spending habits that put stress on all segments of your life. It cost little to nothing for a person to put in place new rules to live by and may even have some positive residual effects.
There are three main reasons most people overspend. Recognizing which ones apply to you is a major key to replacing old habits with new healthy ones.
• Impulse and Emotional Spending: Knowing why you impulse buy or compulsively overspend will help you see potential triggers. If you are an emotional spender, you shop when you’re experiencing sadness, frustration, boredom or a myriad of feelings that aren’t resolved in more productive ways. While the immediate response to spending may be a rush of adrenaline, it won’t be long before it’s replaced with feelings of anxiety and guilt for not being able to control the urge to spend and is especially harmful if there are limited funds to pay the bill when it comes due.
• Social Spending: Another scenario when spending may get out of control is during a social event. Spend an afternoon with family or friends at the mall or a special event like community art fairs, carnivals, etc. can tempt you to spend more than you’ve budgeted. Learn to enjoy window-shopping. Be proactive by carrying only the cash that you’ve designated for entertainment or discretionary purchases.
• Competitive Spending: Keeping up with the Joneses is a deadly game when it comes to your personal finances. Wanting what your neighbor has isn’t enough, you want bigger and better. The social connection to impulse spending can sometimes be summed up, as ‘misery loves company’.
Gaining control of overspending begins with committing to a new way of life – living within your means. A plan needs to be drawn up that allows for a small amount of discretionary spending without allowing for impulsive purchases. If you’ve used up your monthly allowance, whatever you were hoping to buy will have to wait until next month. For bigger purchases, a plan can be devised to put aside a specific amount until you’ve accumulated enough to make the purchase.
If left unchecked, poor spending habits on a limited budget will devastate your credit score. Never underestimate how a low credit score will impact your ability to be approved for the loans or credit you may need in the future. It is one of the most important reasons to examine how you handle a limited amount of revenue and why you should learn to spend it wisely while looking for ways to increase your income.
Vanessa May is a regular contributor to and a variety of financial blogs and websites.