Why Do 84% of Americans Overspend Their Monthly Budget?
Advertising Disclosure: When you buy something by clicking links on our site, we may earn a small commission, but it never affects the products or services we recommend. Last year, a NerdWallet survey found that 84% of Americans with a monthly budget spend beyond it. So what gives? If you have a budget, shouldn’t that help you stay on track? Maybe it’s less about creating a budget and more about…
It can be frustrating and discouraging to constantly overspend your budget, despite your best intentions. You may wonder why you even bother creating a budget if you can’t seem to stick to it. The truth is, there are several reasons why so many people struggle to stay within their budget each month.
Lack of Discipline
One of the most common reasons for overspending is a lack of discipline. It’s easy to get caught up in the moment and make impulse purchases without thinking about the long-term consequences. If you find yourself constantly overspending, try to identify your triggers and develop strategies to help you resist the temptation to spend. This could include avoiding stores where you tend to overspend, leaving your credit cards at home, or using cash instead of plastic.
Emotional Spending
Another reason why people overspend is emotional spending. Many people use shopping as a way to cope with stress, anxiety, or other emotions. If you find yourself turning to retail therapy whenever you’re feeling down, try to find healthier ways to manage your emotions. This could include talking to a therapist, practicing mindfulness or meditation, or finding a new hobby to distract yourself.
Unexpected Expenses
Sometimes, overspending is the result of unexpected expenses that pop up throughout the month. Whether it’s a surprise medical bill, car repair, or home maintenance issue, these unexpected costs can throw off your budget and cause you to overspend in other areas. To combat this, try to build an emergency fund to cover unexpected expenses, so you aren’t forced to dip into your regular budget.
Overall, overspending is a common problem that many people struggle with. By identifying the reasons why you overspend and taking proactive steps to address them, you can start to regain control of your finances and stick to your budget more effectively.