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The key to building wealth and becoming financially independent is to merely spend less than what you are earning.  It may sound very simple, and yet it is a lesson many seem to have trouble learning.  Even as they keep track of how much money they have, a lot of people still can’t manage to prioritize their savings and end up spending a large chunk of it.  Perhaps if one understands the roots of their overspending, it may be much easier to control their spending habits and set aside their money for what’s really important.

In this day and age that we live in, everything just comes too easy for us.  For instance, whereas in times past you had to go to the bank to encash checks, or deposit and withdraw money, these days access to money comes very easily.  Money is now transferred electronically; you can easily acquire cash from your account at any moment via ATM, or you can just spend through your debit card.  At least when you have money on hand of a particular amount, you would not be able to spend more than what you are carrying.  But when you have such complete access to all of your savings, it is easy to lose track of how much of it you are throwing away.

Another factor that contributes to overspending is easy access to credit.  Your inbox would get inundated with all these e-mails of credit card offers.  You’d let yourself be swayed by the high credit limit and the ease of reaping the benefits just by signing up on their website, and you’d think, well, why not?  So you avail of the card, eager to splurge as much as you can.  Now, credit cards aren’t bad by themselves, as long as you’re responsible with them.  But some people seem to have the misguided belief that having a credit card is tantamount to having unlimited spending powers.  Actually, what a credit card amounts to is “buy now, pay later.”  And when “pay later” comes and you don’t have the money to pay back, that’s what gets you into trouble.

One may also be driven to overspend out of pressure.  Your friends may perhaps invite you to join them in a recreational activity that would require you to shell out some cash.  Or you may come across a special sale at the mall and decide to take advantage of the opportunity.  There’s nothing wrong with spending for recreation, really, as long as it won’t take a huge bite out of your savings.  Just as time flies when you’re having fun, it is likewise easy to exhaust your budget when you overindulge.  And to some people, spending is like a drug; something that they just have to do in order to feel good.  Do not spend out of impulse, and never spend on something you don’t really want.  Always keep in mind how much money you have and restrain yourself from spending more than you have to.

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