This post may contain affiliate links, allowing us to earn a commission on the products we would recommend to our families and closest friends. You can find more info on our Legal Stuff page.

Today’s post comes from fellow S&S reader, Kayleigh. Check out her reasons why lose control of our finances (and how to avoid them!).

6 Reasons Why We Lose Control of Our Finances

We all know it can be difficult to keep our finances under control. Especially in an era where credit is readily available, and there are so many things to tempt us into spending (from the consumer credit on the sparkly new iPhone that you simply must have to the overpriced pumpkin spice latte that brightens up your fall mornings).

Of course, grasping the reigns of your finances and keeping them under control doesn’t mean living a life of self-deprivation devoid of life’s little comforts. But it does mean that you need to pay the price of constant vigilance. Unless you assert constant control and maintain an awareness of the state of your finances, they can easily get away from you. And we all know how easy it is to bury our heads in the sand when we’re easily intimidated by money matters.

We are all different, and we all approach financial matters slightly differently. Nonetheless, we can all be guilty of certain habits which can cause us to lose control of our finances. And while no habit is insurmountable, the first step to conquering it is being aware of it. Let’s take a look at some common reasons why we lose control of our finances…

1. We lose sight of our goals

It’s hard to assert any kind of discipline over ourselves when we don’t have a clear incentive. After all, we wouldn’t sweat for hours in the gym if we didn’t think that we’d lose weight and stay healthy as a result. We wouldn’t take evening classes if we didn’t think we’d gain new skills, potentially make extra money, or open up a new career path at the end of it all.

The same goes for our finances.

If we don’t have clear goals, we are less incentivized to save, abstain, count costs, and remain vigilant. So take some time to think long and hard about your goal. Whether you’re imagining great places to retire in luxury, financial stability for your loved ones, or simply saving up for a really good TV, it’s much easier to keep control of your finances when you have clear and personal goals.

2. We forget that little things can make a big difference

When we think about our household finances we tend to think in terms of the big things. The rent or mortgage payments, insurance, taxes, car payments, utilities, and other big bills. These are fairly easy to account for in the household budget. Yet still, we can still find ourselves checking our bank balances and thinking “how the heck did that happen?” when the number on the screen doesn’t match what we imagined.

That’s because we can lose track of the little spends here and there that all add up to a big difference by month-end. From the aforementioned seasonal coffee that makes your Monday morning bearable to the take out pizza that on Friday night because you were too exhausted to cook. Every hot dog, popcorn or bucket of soda when you go to the movies, every fast food lunch you treat yourself to on a stressful workday.

It all adds up!

Again, that’s not to say you should never treat yourself or your family. If that latte is the only thing making Monday bearable, by all means, indulge! But you should be aware of how big a difference these little expenses make.

3. We don’t pay as much into our savings as we should

You’ve scoured the market and found one of the best savings accounts out there. One that gives you a healthy rate of interest and has the potential to grow your money in a meaningful way. But here’s the thing…savings accounts only work for you if you pay into them!

And while paying anything into your savings account is a win, many of us either pay in too little or don’t adjust how much we pay inline with our income. If you have to take some unpaid leave or your earnings dip for some other reason, by all means, reduce the amount you pay into your savings. But if you expect a tax refund, bonus, or another incentive one month, it makes sense to pay a little more in. Whether you pay in 10%, the recommended 20%, or some other amount, make sure that what you pay into your savings is commensurate with your income.

4. We accept credit too readily

Credit can be useful in helping us pay for assets that grow our net worth and improve our lives. But we often waste our credit on consumer goods that just decrease in value while we continue to pay interest on that debt.

By rule of thumb, when it comes to consumer credit, if you can’t afford to buy it outright, you probably can’t afford to get it on credit either. Especially when you factor in how much extra you’ll likely pay on interest. While “Buy now pay nothing until next year” offers sound appealing, deferring payment just means you pay a lot more in interest. Speaking of which…

5. We waste a fortune on credit card interest

Credit card payments can be just one more ball to juggle or they can become an anvil threatening to drop on your head at any moment.

In the digital age, there’s absolutely no excuse for over-paying on credit card interest when it’s so easy to compare cards and move the debt over to new cards with lower (or even 0%) interest.

6. We ignore our budget

Finally, if you take nothing else away from this post, remember this. The easiest way to lose control of your finances is to forget about (or not even draw up) a budget.

Only when you’re aware of every penny coming into and out of the house can you grasp the reigns and asset control over your finances!