Overspending can cause financial problems if left unchecked. US Consumers tend to overspend over $7,000 every year. Combined with rising consumer debt, a very precarious situation is created.
A Household Budget is Crucial
Many households agree that creating a static budget is essential. Sticking to that outlined financial limit is a lot more challenging. It appears that the majority of US consumers cannot stick to such a budget in 2020. In fact, they start out well, yet lose track of it within the first three months.
If the splurging is kept to a minimum, there is no cause for concern. Unfortunately, it appears that consumers are creating genuine financial problems due to overspending.
There is also the ongoing rise in credit card debt to take into account. It is believed that US consumer debt sits at $1.1 trillion as of late 2019. This represents near 20% increase compared to just five years ago.
The Overspending Categories
It is very common for US households to go over budget on a regular basis. Several factors contribute to this type of behavior. Setting up an unrealistic budget won’t do anyone any favors, yet it is a very common occurrence.
Most of the overspending occurs in key segments. Online and grocery shopping are the two most common culprits. There are also various subscription services capable of driving up the expenses quickly.
Surprisingly, a lot of households splurge on coffee, food delivery, and gym memberships. While not uncommon, those are three key reasons for overspending in this modern era. Not visiting Starbucks or Dunkin’ Donuts everyday won’t kill anyone.
Impulse purchases should be avoided at all costs. That has become more difficult in recent years. Overconsumption is a very real problem, primarily in the United States.
It can cause unnecessary friction among US households. Tracking one’s spending and paying a bit more attention can help alleviate most of these concerns with ease.