165. Why You Keep Overspending and Falling Back Into Credit Card Debt (Even With a Good Income)
episode
Becoming The Wealthy You | How to Save Money, Stop Overspending, Get Out of Debt, Budgeting & Personal Finance for Women
19 min
1 speaker
3 chapters
transcribed 1 month ago
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What is the main topic discussed in this episode?
You are listening to the Becoming the Wealthy You podcast with Jermaine Foley.
If you're a woman who makes good money in your career or business, but you're not building wealth like you want to, then you're in the right place. In this podcast, you'll learn how to stop overspending, break free from the cycle of debt, save lots of cash, and become the wealthy woman you were born to be. Let's dive in. Well, hello, everyone. Welcome back to the podcast. Okay, so today we're talking about the two most expensive financial habits that you can have and the hidden patterns behind them. Listen, and when I say expensive, I don't just mean the dollar amount in the moment. Not just the $150 Target run or the $10,000 that's sitting on your credit card and the interest that you may have paid last month.
I'm not talking about that because that's surface level expensive.
Why are overspending and carrying credit card debt the most expensive financial habits?
What I'm talking about is long-term expensive, future expensive, opportunity cost expensive, and wealth delaying expensive. Because expensive isn't just about what it costs you today. It's about what it costs you over time. And the two habits that we're going to talk about today are very expensive. Why? Because they delay your ability to save. They delay your ability to invest at a higher level. They cost you compounding interest. They cost you options and they cost you peace of mind. And the two habits that we're going to talk about today are overspending and the habit of carrying credit card debt from month to month. Now, before we dive deeper into the two habits, we have to call out what's underneath them.
And that's reactive money management. And we discussed this in depth last week during episode number 164. If you didn't get a chance to listen to that episode, I highly recommend you go back and listen to it after this one. But here's a brief overview of what we covered. Reactive money management is when you handle money based on what's happening right now in front of you without regards to what's coming in the future. So here's what that looks like. You manage your money month to month. You solve for what's in front of you. You deal with money when it demands your attention. And you might hear yourself saying this often, I'll figure it out later. I'll deal with that when the time comes for things that seem a little far off, right?
And so to be more specific, you might say something like, I'll deal with Christmas closer to December. If I have to, I'll pull it from savings. Worst case scenario, I'll put it on a card and pay it off, right? Instead of sitting down and thinking about how you can mitigate having to pull from savings or needing to put it on a card, you just kind of push it off into the future and you don't deal with it in the present. Now, here's the part that I really, really want you to hear. The problem isn't just that you're waiting until the last minute. The deeper issue is this. In the months where nothing big is due, nothing big is happening. Let's take a month like February, right? Christmas is over. It's far away.
Maybe your summer vacation is months away and you don't really have anything going on right now. you treat your money like there's nothing due, there's nothing coming. And it feels light. And because it feels light, you might do more, you might spend more. And that's because you're not thinking about the Christmas gifts that you'll need to buy in December, the annual insurance premium that's due in six months. The organization that you belong to, the dues are going to be due in August and your vacation is about eight months away from now and you still have a balance. So technically, you're overspending during that light month. And I'm using air quotes because you're spending money that actually has a future assignment.
You're just not acknowledging it yet. That, my friend, is what reactive money management is, is you living as if the future doesn't require any funding. You're using the money that you have now. You're using it up in the moment, not now. thinking about what's coming in the future.
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Chapters
3 chaptersSpeakers
1 identifiedMore from Becoming The Wealthy You | How to Save Money, Stop Overspending, Get Out of Debt, Budgeting & Personal Finance for Women
189. How to Build Wealth Without Giving Up the Life You Enjoy
188. The Biggest Financial Mistake Women Make After Getting a Raise
187. Making Good Money Isn’t the Same as Building Wealth
186. Why Making More Money Can Still Leave You Feeling Behind
185. Your Past Money Habits Created Your Current Financial Life
184. Why Money Keeps Coming In and Going Right Back Out