All articles tagged with #overspending
Many Gen Z individuals indulge in small treats as a way to cope with stress and celebrate, building a community around this habit on social media, but this behavior can lead to overspending and financial strain if not managed properly.
Some consumers are regretting their use of buy now, pay later (BNPL) services, as overspending has led to financial strain and anxiety. While these services have been popular for their flexibility and low interest rates, some users have found themselves accumulating significant debt, prompting warnings to others. Financial experts and researchers have raised concerns about risky spending on BNPL platforms, with some users reporting difficulties in managing their debt. Lawmakers and regulators are also calling for more scrutiny of BNPL services to protect consumers from potential exploitation.
Some consumers are regretting using buy now, pay later (BNPL) services due to overspending and financial strain, with one individual accumulating $6,000 in BNPL loans over two years. Financial experts warn of risky spending on BNPL platforms, as users tend to consume extra and incur more fees and interest. The Consumer Financial Protection Bureau found that BNPL users had higher credit card utilization rates and lower credit scores than non-BNPL borrowers, with Black and Hispanic consumers being more likely to borrow on BNPL. While BNPL services offer payment flexibility, some lawmakers and consumers are calling for more scrutiny and caution when using these services.
As the holiday season approaches, consumers are advised to start their shopping early to save money and avoid overspending. Over half of holiday shoppers expect to feel financially burdened this year, so it's important to set a budget and stick to it. For overspenders, cutting the budget by at least 20 percent is recommended. Bargain hunters should be cautious of sales that may not actually save them money. Last-minute shoppers are prone to overspending, so setting a deadline to complete shopping is advised. Starting holiday shopping early can help reduce stress and promote mindful spending.
Author Manisha Thakor highlights three reasons why people often compare themselves financially to others and end up spending beyond their means. Firstly, fictional financial lifestyles portrayed in TV shows and movies create unrealistic expectations. Secondly, easy access to credit encourages consumers to live up to unaffordable standards. Lastly, social media exacerbates the problem by presenting curated versions of people's lives, leading to feelings of inadequacy. Thakor suggests acknowledging our vulnerability to overspending, being aware of misleading portrayals on social media, and consciously choosing a reference group that aligns with our true goals to avoid falling into the trap of false financial comparisons.