ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Getting in the habit of overspending and living outside your means can have a negative impact on your financial health, resulting in: A cycle of debt that can be difficult to break due to interest owed. An impossible environment to save for retirement as you try to keep up.

Detailed explanation-2: -A high account balance also has the potential to lower your credit score, which may make it more difficult to secure additional credit. Overspending can also have personal and social consequences. Carrying debt can contribute to stress and anxiety, affecting your relationships and mental health.

Detailed explanation-3: -Peer pressure, boredom, marketing offers, credit cards and ignoring petty expenses can lead to breaking your budget, experts say. Overspending will always have a negative effect on your budget.

Detailed explanation-4: -People often overspend because they underestimate small expenses. It’s easier to keep mental tally of big monthly expenses, like rent, car payments, and utilities.