The True Cost of Overspending Money to Save Face

1. Make a financial plan and stick to it

One of the best ways to avoid overspending is to plan out your budget in advance. Determine how much you can realistically afford to spend each month, and then break down your expenses accordingly. This will help you stay on track and avoid impulse purchases.

2. Don’t spend more than you earn

Living above your means can put a serious dent in your finances if you aren’t careful. While you probably don’t need to be frugal to the extreme, you should steer clear of expensive and unnecessary purchases like new cars, luxury apartments, and fancy vacations if you’re still trying to get your financial footing. This doesn’t mean you can’t treat yourself every once in a while. How much you spend vs. how much you earn is one of the key factors that can make or break your financial health.

While this sounds simple enough, life can get in the way sometimes. Whether you have a couple of unexpected expenses that tank your budget, you lose a source of income, or you just don’t quite make enough to meet your basic needs each month.

5. Take advantage of any money-saving benefits

One in four employees doesn’t save enough to receive the full 401(k) match provided by his employer, according to a report by investment advisory firm Financial Engines. That means the average employee leaves $1,336 in their employer’s coffers each year. That’s like telling your boss you didn’t want a pay raise this year. 

It’s recommended to max out your 401(k) contributions, but at the very least you should contribute enough to get your employer’s match.

7. Stop making Impulse Purchases

Adding a pack of gum to your shopping cart at the grocery store checkout might not seem like a big deal, but habitual impulse shopping is. Online retailers, for example, have added new tricks to entice you to return to your abandoned digital shopping cart — such as by emailing you reminders and promotional offers — and making it easier than ever to make purchases, like offering in-store pickup. Those unplanned expenses can easily ruin a well-planned budget if not kept in check.

8. Don’t let FOMO get the best of you

Fear of missing out — aka FOMO — can cause you to spend money unnecessarily. “You need to turn off social media sometimes so that you don’t always cave to FOMO,” said Martin Dasko, author of “Next Round’s On Me: How to Achieve Financial Freedom in Your 20s” and the Studenomics blog. 

“This dangerous habit convinces you that you’re always missing out and that you need to participate in everything,” Dasko said. “It’s OK to stay in. It’s OK to do your own thing. You’re not always going to miss out.”

9. Stop obsessing on luxury goods or cars

Brand-loyal customers often get the first crack at coupons and special deals, but they’re also more likely to spend on things they don’t truly need. People who shop exclusively for a particular brand are at risk of sabotaging a financial plan.

“Let’s face it, a $25,000 car and a $100,000 car will both take you between points A and B. Is the more expensive car worth jeopardizing your financial future?

11. Automatically save and invest for future needs for emergencies and retirement . Knowing what you have left less, you will spend less. You should always aim to spend less than you make each month, with the goal of saving at least 20% of your income each month. 

An automatic investment plan allows you to automatically transfer a specific amount of money from your paycheck to your investment account—401(k), 403(b), IRA, 529 accounts etc. regularly. It makes investing easy and building your wealth in the long run.

12. Set up autopay to pay in full your monthly bills 

Putting your bills on autopay is a simple and seamless way to budget each month. Once you ‌auto-save your income each month, you will be confident you can autopay in full your monthly bills. It not only becomes hassle-free and debit-free, but also builds up great credit scores for you. Advantages of great credit scores include ‌credit card rewards, higher credit limits‌, lower interest rates, and more purchasing, lending, and negotiating power.

If you're prone to overspending, it's best to avoid using credit cards. This way, you won't be tempted to spend more than you can afford. Instead, use cash or debit cards for your purchases.

In conclusion, overspending to save face can lead to stress and anxiety. When you're constantly worrying about how you're going to afford everything, it can take a toll on your mental health. This can impact your overall quality of life.

It's no secret that many of us are guilty of overspending from time to time. Whether it's buying that new pair of shoes you've been eyeing or splurging on a fancy dinner, sometimes it's hard to resist the urge to spend.

But what you may not realize is that overspending can‌ be dangerous. It can lead to debt, financial instability, and even mental health issues. So before you order online or swipe your card, think carefully about whether you really need that purchase. It might just save you a lot of trouble down the road.

If you're overspending to save face, it's important to be aware of the potential consequences. Getting in debt, missing out on investment for future needs, and stress & anxiety can all be negative outcomes of this behavior. Be mindful of your spending and make sure you're doing what's best for you, not what's best for others.

If you find yourself spending money to save face, it is important to take a step back and reevaluate your priorities. Next time you're tempted to overspend to save face, remember the saying "you can't put a price on dignity." It's better to be happy and comfortable in your own skin than to try to impress others. Don’t become a financial burden of your loved one. You will earn greater respect from your loved one by not over spending money to save your face and impress others.