Personal Finance – How to identify excessive personal spending

You might think that it is easy to recognize excessive personal spending when you observe someone buying goods and services according to what appears to be a large appetite for desires. This observation may be valid, but it runs the risk of judgment, possibly not having enough information about the person being observed. A better approach is to assess personal spending in the context of achieving the desired goal and then determine whether the spending pattern can support the resource need to achieve the desired goal. Here is a basic plan that can help you quickly identify excessive personal spending.

1. Create a future reference by visualizing the situation you would like to be in three to five years from today. It is best to establish a long term position first before the short term in order to keep you focused and motivated

2. Write this perception into a statement titled “Vision Statement” and include the emotional response expected during your journey toward self-realization

3. Write down an achievement objective necessary to achieve your vision in each of the following areas such as: Social – eg marriage, children or a big vacation or visiting at least three continents. educational – for an advanced degree, certification, or career change; financial – multiply your family’s income, start a business, or create a fund for your children’s education; and personal health – actively participate in the practice of “good” health habits

4. Determine the dollar amount required to achieve your goals and achieve your vision within three to five years

5. Determine your current spending pattern/month to see if you have the resources or if you will need to make adjustments in order to achieve your vision in three to five years

This step-by-step method allows for self-assessment to determine your spending pattern and provides you with data to decide if you are overspending.

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