Most Americans at least occasionally spend more than they make.
But they're mostly OK with that.
Those are the findings from a new survey conducted by COUNTRY
May 2012 COUNTRY Financial Security Index
indicated that while 52 percent of respondents spent in excess of
their monthly income in at least a couple of months of each year,
only 9 percent said their lifestyle is more than they can
Families make budgets but don't stick to them
On a positive note, the survey found 51 percent of respondents
in place. However, it appears that many have difficulty following
it every month.
"Half of Americans have taken an important first step in setting
up a budget," said Keith Brannan, vice president of financial
security planning for COUNTRY Financial, in a statement. "But, a
budget is only helpful if it's realistic and tailored to your
Unfortunately, having a budget isn't necessarily the same thing
as following a budget. Budget shortfalls occurred at least six
months out of every year for 21 percent of respondents.
'Perception gap' clouds problem
COUNTRY Financial identified a "perception gap" between how
individuals view their finances and their actual spending
Perhaps because most families have a budget, they don't see
their overspending as a problem. To compensate for excess expenses,
those surveyed used a variety of tactics:
- Used money from a savings account: 36.2 percent
- Used a credit card: 21.7 percent
- Delayed bill payments: 12.3 percent
: 7.8 percent
Of the 21 percent of survey respondents who reported regularly
having monthly expenses in excess of their income, only 13.5
percent adjusted the next month's spending to get their finances
back on track.
Missed savings goals
In addition to overspending their budget, many Americans also
say they are missing their savings goals. According to the survey,
61 percent of budgeters and 30 percent of non-budgeters create a
monthly savings goal. However, of those, 57 percent of budgeters
and 54 percent of non-budgeters say they meet their goal only half
of the time or less.
Brannan says families must be careful to keep their savings
account balance healthy, especially considering how many dip into
their emergency funds to pay excess expenses.
"While savings keep you financially secure, you must replenish
them," Brannan said. "Try to avoid using credit cards to cover
excess spending. If possible, anticipate larger purchases and
upcoming bills, and schedule payments around your income."
For families who find they are dipping into their savings
account for discretionary purchases, moving their funds to a less
accessible, but still liquid, account may help curb the urge to
spend. Money market accounts with limited check writing abilities
are one option to consider for this.