Nearly 75% of Americans Have Spending Problem, While 84% Justify Overspending

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In a Clever Real Estate study, more than half of all Americans (55%) confess to moments of reckless spending. This contributes to three-quarters of them admitting they grapple with the problem of overspending. Beneath the surface of credit card swipes and online purchases lies a pattern of excuses and emotions — fear, embarrassment, and shame — that many dare not unveil.

While nearly everyone makes a poor spending decision at some point in their lifetime, a recent survey found that among adults in the United States, it has almost reached epidemic proportions. It isn’t about a one-time purchase that overshot a budget; it’s about repeated behavior dragging Americans further into debt. Sadly, many overspend as a coping mechanism, which only adds to their problems.

Overspending Begins With Bad Spending Habits

Bad buying habits are often at the root of overspending. Those with spending problems absorb these behaviors during childhood through observing spendy parents. Conversely, various contributing factors could kickstart their development during adulthood.

However, experts note a pattern in age groups that overspend. According to Clever Real Estate, 86% of millennials and 87% of Gen Z report spending issues, whereas 56% of boomers admitted to having similar.

Whether impulsive purchases that consumers later regret (78%), skipped bill payments due to non-essential spending (46%), or making ill-informed purchases (38%), overspending is a growing problem despite increasing debt in homes across the United States.

The Roots of Overspending

When Americans cut expenses, some may rationalize hastily made purchases. Impulse buying is not new; while 96% of the respondents admit partaking, 84% admit to justifying frivolous overspending or making unnecessary purchases by claiming they “deserve it” or are “treating” themselves. 29% use overspending as a coping mechanism for stress, also called “doom spending.”

The ironic twist to these excuses is that they compound the stress already there. That “treat” becomes treacherous as the debt mounts. The financial burden buffs the shine from the purchase, leaving consumers to contemplate if they also deserve the debt, shame, and stress from their impulsive purchases.

Just like that, the doom spending cycle perpetuates.

Around 28% of respondents admitted to avoidance, preferring to refrain from checking their accounts so they don’t have to face their level of overspending.

Overspending Is a Sore Spot in Relationships

Though experts state financial issues are among the most commonly cited reasons for divorce, 32% of American consumers admit they avoid discussing finances with their spouse, partner, or others close to them because it causes too much tension.

Additionally, 21% report being embarrassed to discuss finances and spending habits with those closest to them, and nearly one in five respondents (16%) don’t discuss finances in any capacity. Swallowing emotions and financial frustrations often leads to hiding finances from a spouse or partner (28%) or hiding specific purchases (28%). Around 14% of respondents report opening a secret credit card or bank account.

Around 15% of respondents confess that they are afraid to approach a discussion on their partner’s spending habits.

Most Americans Place the Blame for Overspending Elsewhere

Even though credit cards are subject to the hand’s will that wields them, many people still deny responsibility for overspending. The majority blame the economy and skyrocketing prices, which isn’t necessarily untrue. After all, if necessities didn’t cost so much, it would be much easier to afford them and even have room in the budget for a few extras.

So, 56% of respondents suggested their spending would not be an issue if the economy improved. More than 62% said that if prices were lower, their spending habits would not cause them problems.

Shirking responsibility for their reckless spending tends to be more prevalent among younger generations. Regarding believing or accepting that their financial difficulties are not their fault, only 21% of boomers agreed, while 36% of Gen Z and 40% of millennials felt that way.

Denial is also a common reaction to overspending, with just 35% of respondents calling themselves overspenders. Even though 27% admitted that they live beyond their means, only 27% felt that their spending habits need work.

Would Changing Careers or Moving to an Area With a Lower Cost of Living Help?

To combat overspending and stretch their budget, 61% of respondents favor moving to an area with a lower cost of living.

Some consumers go to great lengths to support their financial lifestyle, regardless of its sustainability. While around 72% of overspending respondents explored side hustle ideas, 71% considered changing jobs within their field. About 37% considered renting part of their home or getting a roommate.

Around 64% have considered selling their possessions, and 61% have considered moving to an area with a lower cost of living. A shocking 34% have considered posting content on the subscription-based social media platform OnlyFans.

Ways to Combat Overspending

Experts agree that budget adherence can slow overspending, but many consumers overdo their budgeting approach; shoppers eager for relief create too-strict budgets with no flexibility, which are only effective in theory but not in practice.

The 50/30/20 budget is a money management method that categorizes household income — 50% of income generated is allotted for essentials like food, housing, and transportation; 30% is for entertainment and other desires; and 20% is put in savings or put toward debt repayment.

Even something as simple as writing down every purchase can help curb spending. Reviewing transactions every week or month can show where they spend most of their income and how much is frivolous.

Awareness and accountability are the first steps in effectively managing your money. If you can get a handle on that, you are halfway there.

This article was produced by Media Decision and syndicated by Wealth of Geeks.