According to a recent study, Americans have an overspending problem. The high cost of living and inflation have many on a tight budget, but others live beyond their means, even with soaring prices. Clever Real Estate surveyed 1,099 people about their financial habits, and 55% said they spend “recklessly,” while a whopping 74% admitted they have an issue with spending too much.
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About 45% have felt shame about their finances and have “cried over their spending habits,” but 56% of people believe the economy is the issue, not their purchases, and 61% believe the issue is high prices. That said, “they’d consider a wide variety of options for more cash, from moving to a cheaper area to changing careers or posting content on subscription-bases social media accounts,” per Clever Real Estate.
Americans have several regrets about their financial choices, from going into debt because of overconsumption to exceeding monthly budgets. Here are the top ones, according to the survey, and how you can avoid them.
Also read how a self-made millionaire opt for the budget version of these various items.
Spending Instead of Saving
With the click of a button, we can buy almost anything we want. There’s an opportunity to spend money everywhere, and 32% of people surveyed shared they spend too much money instead of building savings. Getting stuck in an endless cycle of mindless spending is easy, but there are ways to break that bad habit. Rachel Cruze, #1 New York Times bestselling author and financial expert, gives the following tips for getting back on track and avoiding the mistake of spending instead of saving.
- Monitor your spending. Know what you’re buying, and make a budget that includes the necessities and cuts out excess spending.
- Use a free budgeting app that helps create a realistic budget and tracks debt and savings each month.
- Don’t get sidetracked with spending. Buy what you need only.
- Stop eating out.
- Ignore the sales. We all love a good deal, but buying something you don’t need because it’s a reasonable price is spending, not saving.
- Swear off debt for good and work on paying off your loans.
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Using Credit Cards Too Much
U.S. consumers have a mountain of credit card debt and collectively owe $1.14 trillion, according to the Federal Reserve Bank of New York, up $27 billion from the second quarter of 2024. 17% of Americans have remorse over how much they’re racking up on their plastic. While credit cards can come in handy when used responsibly, it’s not hard to get into financial trouble when you can’t pay off the balance each month and interest builds up. To avoid credit card dependency, Jade Warshaw, personal finance coach, recommends the following:
- Stop using your cards and pay them off.
- Create a monthly budget.
- Don’t overspend and blow your budget.
- Have $1,000 in savings for emergencies. Once the debt has been paid off, build the emergency fund to cover three to six months of expenses.
Groceries
Everyone feels the pain of buying food, with costs skyrocketing, and 52% of people admit they spend too much on groceries. While that’s been easy to do since prices surged 25% from 2019-2023, according to the U.S. Department of Agriculture, due to “supply chain disruptions” during the pandemic, prices are finally starting to come down, and there are simple ways to cut back.
To avoid sticker shock at the grocery store, Ramsey Solutions suggests the following:
- Buy in bulk when it’s not wasteful
- Skip name brands and buy generic
- Reevaluate where you shop. Ditch the upscale stores for now and buy where it’s cheaper
- Eat less meat
- Shop online to track spending
- Meal prep
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This article originally appeared on GOBankingRates.com: 3 Top Regrets Americans Have About Spending — and How You Can Avoid Them
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