Overspending: At The Root of Most Financial Problems

Overspending, in many ways, is what is at the root of most people’s financial problems. Essentially, they spend more money than they have and put the rest on credit. They build up debt until it reaches critical mass and then either cut back out of necessity, or use the equity in their home to pay it off and start the whole cycle again. Talk about mortgaging your future away.

At Finicity, one of the first things we tell people is to start spending within their income and get to “30 days funded” as soon as possible. Having a full month’s worth of income in the bank allows you to schedule all of your bills to be paid automatically and provides you with a cash buffer that prevents you from accumulating further debt. The way you accomplish this is make a commitment to yourself to spend within your envelope balances 100% of the time.

That’s why you need to set up a budget and stick to it. The problem is that “budget” may be a bit of a bad word. It implies things like responsibility and accountability-stuff no one, including myself-really likes to think about. However, having a budget and employing personal fiscal responsibility is the only way to truly achieve your financial goals-like getting out of debt and reducing your financial stress.

Fortunately, Mvelopes makes that a whole lot easier. By using it to plan your expenses before you spend, you can meet all your financial obligations and still have money left over to maintain the lifestyle you’ve become accustomed to. Truthfully, having a budget usually means having more money in your account-not less. And that’s peace of mind that is far more valuable than any safety net an overdraft account will provide.

Nick Lashley, Customer Support