3 Signs You're Spending Too Much -- and How to Stop

If these signs apply to you, you may be going overboard.

Unless you really go in and check your bank account or credit card balance every day, it's easy to lose track of how much you're spending. This especially holds true today, when high inflation has driven the cost of consumer goods and services way up. But if you've been going overboard on the spending front, it could be hurting your finances in a meaningful way. Here are three signs to know if that's the case.

1. Your savings account balance is shrinking

You may, from time to time, have to dip into your savings account to cover your bills when your paycheck falls short. That's not necessarily a problem. After all, that's what savings are there for. But if you start noticing that your savings balance is shrinking consistently from one month to the next, it's a sign you may need to rethink your spending -- and cut back on it.

2. You keep adding to your credit card tab

Carrying a credit card balance is something a lot of people end up doing from time to time. But if that balance keeps growing from one month to the next, it's a sign that you may be overspending given your income. That's not great, because while a small credit card balance may not cost you so much in interest, a larger one can be more damaging financially. Too large a credit card balance could also bring down your credit score, making it harder to borrow affordably when you need to.

3. You're not getting any closer to meeting your financial goals

Maybe you're trying to save for a house or sock away enough money for a down payment on a new car. If you find that you're getting nowhere with those goals, then your spending habits may need to be revisited.

How to avoid overspending

If you're guilty of spending too much, there's a potentially easy fix -- put yourself on a budget. That way, you'll have a clear sense of what your various bills look like, and you may have a much easier time identifying which spending categories to prioritize and which to scale back on.

For example, once you set up a budget, you may come to realize that your grocery bills cost a good $100 more per month than you thought they did. That may prompt you to cut back on another expense, whether it's canceling your gym membership or putting your cable package on pause.

You can set up a budget yourself on a spreadsheet or explore the different budgeting apps that can help you track your spending with ease. In fact, the great thing about using these apps is that many can sync up to your bank and credit card accounts, giving you a clear sense of where your money is going.

Overspending could prevent you from meeting your goals and even land you in debt. At a time like this, when so many everyday expenses cost extra, it's more important than ever to stick to a budget -- and take control of your financial behavior.