Jon Dulin, Wealth of Geeks
Americans don’t have a spending problem; they have an overspending problem. In a recent Clever Real Estate survey, 96% of respondents confessed to impulse buying, and 88% admitted to feeling stressed about money.
Instead of admitting they have a problem, many look elsewhere to place blame, most notably on the economy, incomes, or inflation. While it is true that the tanking economy did indeed cause many financial setbacks for families throughout the nation, rising prices and low wages were not the only problems.
A large portion of the debt problem and poor economic health in the United States is attributed to Americans who can’t control their spending habits and don’t save nearly enough money.
—————
Overspending has deep roots
Simple math says that if someone spends more than they earn, they won’t be able to save any money. However, Americans’ impulsivity seemingly overrides acknowledgment of overspending and its consequences. Clever says 74% admit having a spending problem, and more than half (55%) said they spend recklessly.
Around 31% of respondents feel embarrassment, fear, and shame regarding their finances. Some avoid money talks for these reasons, saying thoughts about money spark negative emotions. Nearly half said they’ve cried over their spending habits.
—————
Which generation has the worst spending habits?
Spending is a struggle for many, but some groups have more difficulty than others. Overspending is more prevalent among younger generations, as 87% of Gen Z and 86% of millennials admit to this practice. However, boomers are not exempt, as 56% also overspend.
Across the board, 38% of respondents said that when they spend, they do so recklessly but make the purchase anyway. 78% say they make purchases they regret immediately.
Nonessential spending has also caused 48% of Americans to miss bill payments, choosing frivolous purchases over existing debts.
One reason for overspending could be the lack of excitement associated with saving money. Those with spending problems can “gamify” the practice through money-saving challenges, encouraging them to put money aside.
—————
Spending regrets are real, but not enough to stop
While spending regret is a common complaint, it is not enough to stop overspending, start saving, and develop healthier financial habits. Respondents’ top regrets include spending money they should be saving (32%), spending too much (22%), and making too many impulse purchases (18%).
Fourteen percent admit to not comparing prices, and 11% say that spending is a coping mechanism. The biggest impact overspending has on people, however, is putting them into debt.
—————
Who’s to blame?
The writing is on the wall, but many Americans don’t want to see it. They don’t fault reckless or careless spending habits for financial distress but shift blame to a bad economy (56%) and high prices (61%).
While there may be some truth to this — prices and living costs are indeed high — adults still have to be adults. Controlling your spending is part of the deal.
Stress is another culprit, with almost one-third of Americans admitting they engage in “doom spending,” overspending to cope with stress.
—————
What would you do to get out of debt?
Spendy consumers sometimes cite external factors as sources for financial woes. This blame game shifts solutions away from spending less to making more, leading to explosive side hustle and freelance growth.
Seventy-two percent of people say that they have gotten a second job or would consider getting one to earn more spending money.
Searches like “ How to make money on OnlyFans as a guy “ and “gig economy jobs” spike as millennials (53%) and Gen Zers (51%) admit they would post content on OnlyFans to make extra money.
—————
What to do if you are in debt
Regarding personal spending, 42% of respondents called themselves “careful,” 41% “responsible,” and 30% said their spending is “controlled.”
At the other end of the spectrum, 23% said they were impulsive spenders — 19% classified their spending as “unpredictable,” and 13% “excessive.”
Impulsive, unpredictable, or excessive spenders can yet manage their financial health and get out of debt.
Creating a budget is the first step and can make a huge difference. Struggling consumers can appoint an “accountability partner.” Both parties benefit from sharing struggles and successes by working together and holding each other accountable.
Dave Ramsey’s Baby Steps program can help those in debt recover and build a solid financial foundation. While it requires discipline and self-control, those are important fiscal lessons.
Of course, side hustles can help those looking to earn extra money to pay off debt. The only caution here is that more money isn’t the solution if out-of-control spending remains. Having more money could lead to even greater spending.
Talking to a counselor may be helpful for someone who truly feels they can’t control their spending. There might be deeper issues at play, and overspending is an outlet for feeling better.
Instead of admitting they have a problem, many look elsewhere to place blame, most notably on the economy, incomes, or inflation. While it is true that the tanking economy did indeed cause many financial setbacks for families throughout the nation, rising prices and low wages were not the only problems.
A large portion of the debt problem and poor economic health in the United States is attributed to Americans who can’t control their spending habits and don’t save nearly enough money.
—————
Overspending has deep roots
Simple math says that if someone spends more than they earn, they won’t be able to save any money. However, Americans’ impulsivity seemingly overrides acknowledgment of overspending and its consequences. Clever says 74% admit having a spending problem, and more than half (55%) said they spend recklessly.
Around 31% of respondents feel embarrassment, fear, and shame regarding their finances. Some avoid money talks for these reasons, saying thoughts about money spark negative emotions. Nearly half said they’ve cried over their spending habits.
—————
Which generation has the worst spending habits?
Spending is a struggle for many, but some groups have more difficulty than others. Overspending is more prevalent among younger generations, as 87% of Gen Z and 86% of millennials admit to this practice. However, boomers are not exempt, as 56% also overspend.
Across the board, 38% of respondents said that when they spend, they do so recklessly but make the purchase anyway. 78% say they make purchases they regret immediately.
Nonessential spending has also caused 48% of Americans to miss bill payments, choosing frivolous purchases over existing debts.
One reason for overspending could be the lack of excitement associated with saving money. Those with spending problems can “gamify” the practice through money-saving challenges, encouraging them to put money aside.
—————
Spending regrets are real, but not enough to stop
While spending regret is a common complaint, it is not enough to stop overspending, start saving, and develop healthier financial habits. Respondents’ top regrets include spending money they should be saving (32%), spending too much (22%), and making too many impulse purchases (18%).
Fourteen percent admit to not comparing prices, and 11% say that spending is a coping mechanism. The biggest impact overspending has on people, however, is putting them into debt.
—————
Who’s to blame?
The writing is on the wall, but many Americans don’t want to see it. They don’t fault reckless or careless spending habits for financial distress but shift blame to a bad economy (56%) and high prices (61%).
While there may be some truth to this — prices and living costs are indeed high — adults still have to be adults. Controlling your spending is part of the deal.
Stress is another culprit, with almost one-third of Americans admitting they engage in “doom spending,” overspending to cope with stress.
—————
What would you do to get out of debt?
Spendy consumers sometimes cite external factors as sources for financial woes. This blame game shifts solutions away from spending less to making more, leading to explosive side hustle and freelance growth.
Seventy-two percent of people say that they have gotten a second job or would consider getting one to earn more spending money.
Searches like “ How to make money on OnlyFans as a guy “ and “gig economy jobs” spike as millennials (53%) and Gen Zers (51%) admit they would post content on OnlyFans to make extra money.
—————
What to do if you are in debt
Regarding personal spending, 42% of respondents called themselves “careful,” 41% “responsible,” and 30% said their spending is “controlled.”
At the other end of the spectrum, 23% said they were impulsive spenders — 19% classified their spending as “unpredictable,” and 13% “excessive.”
Impulsive, unpredictable, or excessive spenders can yet manage their financial health and get out of debt.
Creating a budget is the first step and can make a huge difference. Struggling consumers can appoint an “accountability partner.” Both parties benefit from sharing struggles and successes by working together and holding each other accountable.
Dave Ramsey’s Baby Steps program can help those in debt recover and build a solid financial foundation. While it requires discipline and self-control, those are important fiscal lessons.
Of course, side hustles can help those looking to earn extra money to pay off debt. The only caution here is that more money isn’t the solution if out-of-control spending remains. Having more money could lead to even greater spending.
Talking to a counselor may be helpful for someone who truly feels they can’t control their spending. There might be deeper issues at play, and overspending is an outlet for feeling better.
