Here are the five primary reasons we overspend: periodic, income, planning, emotional, and (drumroll, please) credit cards.

Periodic – A periodic expense is an anticipated non-monthly expense.  These are memberships, dues, registrations, tuition, holidays, birthdays, anniversaries, graduations, insurance, car maintenance, vacations, taxes, and more.  People tend to get very flustered when one of these “have-to” expenses suddenly pops up.  Being financially savvy and astute requires planning ahead and taking preventative measures for more clarity and fewer surprises.  What you can do:  Create and maintain a calendar of periodic expenses.

Income – Payday is not a good day to go shopping.  This includes bonuses, tax refunds, and gifts.  While many people feel rich when direct deposit hits their account, you and I both know that money is largely spoken for.  “Pay yourself first,” means making transfers into your retirement and savings accounts.  You’re mentally establishing savings as a priority and building cushions for your nest egg and emergency funds. Then, ideally following a budget or spending plan, pay all of your bills on time or early and make sure your basic needs are met.  What you can do: Keep an ongoing list of your needs and wants.  Remember – savings, bills, fun.

Planning  – Rushing and underestimating are very common pitfalls of overspending. Don’t wait until you’re on the way to the party to buy something, plan ahead. “I thought my last set of new car tires would cost $400 but the total bill was $686 with alignment, recycling fees, taxes and same day service.” How much money do you need in your accounts each week? At the end of the month? What financial housekeeping tasks need to be taken care of? What you can do: Research. Take a few minutes every month to be proactive and plan forward. Scan your calendar while creating your spending plan.

Emotional – Retail therapy, anyone?  Human beings are highly motivated by pleasure and pain. People seek release from tension in a variety of ways including spending money on food, drinks, clothes, electronics, travel, entertainment, hobbies, and more. Your emotional state will invariably have an impact on the bill. Tune in to your feelings. Are you calm, relaxed and in a state of equanimity or are you triggered, angry, lonely, or fearful? What you can do: Return or sell unused, unwanted or guilt-ridden items. Keep a list of healthy stress relievers handy. Experiment with tracking your emotions before, during and after both everyday and spontaneous shopping excursions.

Credit Cards – Not only does research suggest that people overspend by 23% when they use credit cards vs. debit cards or cash, but there are other risks as well: debt, financial vagueness, and underearning. Even for those of you who pay off your balances in full every month, there is still a disconnection between acquiring something and the reality of paying for it. Credit card usage can lead to magical thinking and magical thinking can cause you to buy, spend and shop to the point of excess. What you can do: Try one month without using credit cards and record the impact on your spending habits and money consciousness.

Most importantly, if you do overspend, take a moment to reflect on the reason!