Everyone has a financial blind spot, and they’re often different for every person. It’s the thing where even if you’re generally doing a good job of budgeting, you can’t seem to stop spending on one thing in particular. Let’s break down where your money is actually going, what most people overspend on each month, and how you can reverse course and spend less.
The Anatomy Behind Overspending
A lot of overspending comes from justification. One of the biggest culprits of this is going out for a coffee each morning. You tell yourself, “it’s just $5, that’s nothing in the grand scheme of things!” Sure, there’s some truth to that, until you realize you’re talking about a habit that costs you over $1000 a year.
Going out to eat is similar, and arguably one of the most universal things we all overspend on. We’ll say we’re too tired to meal prep or pack a lunch and are more than willing to drop $15 on a meal we could have made for cents on the dollar. It’s convenient, which is also what makes it so attractive.
Food delivery makes things even worse, because these cravings are usually just a few taps away now. You come home to nothing in your fridge, but you have to eat, right? The delivery fee is a small price to pay for nachos at your doorstep in 20 minutes. But just like with the coffee, it’s not a small price at all.
The Psychology Makes It Even Harder
So most of our overspending comes from us believing the ends justify the means. But why do we think that way in the first place?
It’s all about perception. We’re great at identifying big expenses. We know rent is $1,500 and the car payment is $400. But the small, frequent purchases are harder to track. They feel like little treats or rewards, not part of our overall budget. We don’t think of a $7 pastry as a financial decision; we think of it as a small luxury we’ve earned after a hard day’s work. But the cumulative effect of these small choices is what truly hurts our savings goals.
What Can You Do About It?
The good news is that fighting back against overspending is easier than you think. It just requires you to be more intentional with your spending, both your time and money. You don’t have to completely give up on these luxuries, either.
Take the coffee, for example. You can allocate a “coffee fund” in your budget that’s smaller than what you’re used to. Maybe you cap it at $10 a week, cutting the expense in half and saving you $500 a year. Once the fund is gone, you know it’s time to start making coffee at home.
Shopping with a list and pre-planning your meals is another way to reduce overspending on food. Just remember to fill the list with things you’ll actually eat and use. Don’t forget to give yourself snacks and easy-to-make meals or meal prep items for those days when you’re too tired and the siren call of the app is too loud.
