• September 28, 2022
  • Posted by General Electric Credit Union
  • 3 read

3 Smart Steps to Take After Overspending

Consumers overspend by around $7,000 a year on average.1 In doing so, they may enter a cycle of debt that’s difficult to break out of, incur overdraft fees, or have to put off financial goals because their budget is in the red. But that doesn’t mean there’s no coming back from overspending! With some forethought and strategizing, accountholders can look forward to better days ahead. 

What to do after overspending 

1. Pinpoint how it happened 

Accountholders likely don’t check their balance, see they don’t have enough funds, and make a purchase anyway. In reality, they may not actually know how much money they have available, either because they don’t check their accounts frequently enough or because they made a recent big purchase and didn’t realize how much it would drain their accounts. This isn’t uncommon spending behavior, either, as 65% of Americans don’t know what they spent last month.2

Don’t get caught up in this way of managing money. Instead, utilize the following tools and resources to stay on top of things: 

  • Online and mobile banking. Access to both of these banking options ensures accounts – and balances – are always on hand. Accountholders can even check on the fly if they have enough funds for a purchase. 
  • Account alerts. The best credit unions give members the option to sign up for alerts, so they know when a balance is below a pre-specified amount, when a withdrawal or deposit is made, or when a check clears.  
  • Card controls. Debit Card Controls are a fantastic way to reel in your spending. Set spend limits, enable or disable purchases by transaction type (like online purchases), and much more. 

2. Survey the damage 

Rebounding is only possible after an obstacle has been identified and measured up. Much the same way a homeowner would survey their lawn after a storm to pinpoint damage like missing shingles or fallen branches, accountholders should do the same with their finances after overspending. 

While swiping a debit or credit card may not feel as destructive as a thunderstorm, it can absolutely throw a budget off track and lead to overdraft fees (unless an accountholder has protection in place – more on that in the next section). So before moving forward, pause, reflect, and strategize what needs to happen to make up for it. This may mean temporarily cutting back in a certain spending categories to make up for the difference. 

3. Do better next time

Accountholders can also safeguard their wallet with overdraft solutions. Every financial institution is different, but some common varieties of protection include overdraft transfers, which transfer funds to a checking account from a linked savings account to cover the overdrawn amount; and an overdraft line of credit, which transfers funds in from a line of credit. For the latter, an application is likely needed to assess credit and other eligibility requirements. 

General Electric Credit Union (GECU) members can enjoy both of the overdraft solutions above in addition to Courtesy Overdraft, which provides secondary coverage if other solutions are exhausted. Pay with confidence knowing debit card purchases won’t get declined at checkout. And to keep spending reigned in, Online Banking or mobile app users can lean on Money Management. This secure, intuitive dashboard will help accountholders pinpoint where their money is going and where they could cut back to avoid overspending in the future. 

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