LOUISVILLE, Ky. (WAVE) – In the latest economic well-being report released in May 2023, American adults announced they were spending more, but they were not making more. No more money coming in but more going out does not add up.
Nick Pisano is a Data Writer at Clever Real Estate. His article “2024 American Spending Habits: Nearly 75% Have an Overspending Problem” was a brutal, eye-opening look at how recklessly Americans overindulge knowingly.
“74% of Americans, nearly 3/4, say they have an overspending problem in some area of their life,” proclaimed Pisano.
Many Americans admit to missing bills, busting their budget, and impulsively buying not necessarily what they need but anything they want.
”One in six say that spending has ruined their lives,” exclaimed Pisano. “Look around at your five of your closest friends, and chances are someone in that group may be one of them.”
Even in the face of persistent inflation, high interest rates, and expenses out pacing earnings, we are shopping more than we should.
”We found that Americans love to treat themselves,” shared Pisano. “A large, large number will say they feel like they deserve it. When they buy themselves something they don’t need. We found nearly 1/3 of people, 31% said they were ashamed of their financial state and a higher percentage than that, 36% said they feel guilty about spending.”
When the shame and guilt turn into panic because you don’t have enough money to pay your bills and your debt is due, that is an obvious red flag. You have prioritized the pleasure you receive from your purchase instead of meeting your financial commitments.
”People are missing bills because of this,” explained Pisano. “People are concealing stuff from their spouses and their partners because of this. A flat third said money can buy happiness, and that’s particularly high among Gen Z and Millennials. Half Gen Z and 43% of Millennials.”
About 79% of Americans confess to purchasing items they never end up using. Half of Americans, 47%, will buy things simply because they are on sale, regardless of whether they need them. We shop simply because we want to. The fix to the problem must be the same. Stop, simply because we know we need to.
”It’s a lot of bad behavior that comes with the idea that your spending is going to make you happy,” shared Pisano. “18% of people don’t track their spending at all. How could you keep your spending under control if you don’t really know what going in and what’s going out.”
Your budget is your guiding star. It tells you exactly where your money is going and how much should go there. If you need help, try a budgeting app.
”A lot of them are free,” explained Pisano. “A lot of them are really easy to use. A lot of them can help you really get your budgeting in control really easily.”
For everyday expenses, a safe saying to live by, “If you can’t pay cash, you can’t afford it.”
”Use debit cards and use cash instead of credit cards,” exclaimed Pisano. “You don’t end up with a big bill. You don’t end up with a liability you can’t take care of at the end of the day because you’re only spending what you have at the moment.” There are some things you can do to help cut your spending, if you do them. They are the tried-and-true things that have been suggested repeatedly.
- Use a shopping list and stick to it.
- Create a budget.
- Monitor your spending.
- Use cash or a debit card.
- If you use a credit card pay it off at the end of the month.
- If browsing the web without buying is a problem, then reduce your time on social media and the internet.
- If you have given permission for your favorite stores to send you text and emails for sales and specials. Unsubscribe!
Read the full report on Americans’ spending habits by clicking here.
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Source: Americans are spending more money than they’re making
