We’ve all seen it—the client who appears to be living large. But once you peel back the layers, you see they are not living a sustainable life and are usually unprepared (financially) for the future.
I believe this is largely due to overspending.
Unfortunately it’s all too common to see clients that overspend in their daily lives. The approach we must take to confront this will vary depending on each situation. It is a sensitive area that I’ll cover in the next post.
For now, I want to identify the causes for overspending so that you can may look out for these habits and help clients become aware in the process.
Even the clients with the best of intentions regarding their financial goals may find they are constantly “sabotaging” their own efforts. I believe there are four common factors that cause overspending to occur.
Of course nobody would ever say outright “How can I burn through my budget?” Yet that’s exactly what happens.
While many believe they are in the clear because they’re following what others are doing, they find themselves in the red far too often.
This goes back to a lack of education around what healthy spending is and how to establish a solid budget.
Clients must realize that every single person’s financial goals and necessities are unique. They can’t just model their own plan after another person’s.
If you flip through any channel, you’re likely to see most characters with a fresh manicure, the latest gadget, or an idealistic upscale home.
Because we are constantly shown the media version of the “average life” we start to internalize what we should have. And it can lead to unrealistic expectations that push us to overspending.
Yes, social media has many benefits, but if used irresponsibly it can also do harm.
Many of us recognize that social media has provided society with an alternate universe of sorts. It allows us to stage images just as a magazine would for an advertisement.
These staged scenes can actually lead people to wonder about their own sense of identity and worth. Ultimately our vulnerability to overspend can also stem from this.
Planning every detail of every day may be tedious and unnecessary, but rushing and underestimating too often can actually lead to overspending.
Imagine you’re on your way to a party and you want to pick up a bottle of wine or a last minute gift.
If you had planned for it earlier while you were out shopping with a budget, you would’ve saved time and money. This is just an example, but it does show the importance of planning to combat overspending.
Have you noticed these behaviors as an influencer on your clients’ spending habits? How have you addressed overspending? Leave a comment below!
If you want more tips on how to approach this sensitive situation, let’s talk. I’ll help you craft the best approach that will grow your business.