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Overspending in America – The Sad Truth

If you are a first time reader here, then I will let you know that I LOVE infographics.  I am a very visual leaner, so if I can gain some knowledge through a picture, then I am going to do it.

I found this awesome, yet sad, infographic the other day and it really disturbed me.  Not only do American’s have an overeating problem, but we also overspend (much like our government).  According to the graphic below, the average American is spending $1.33 for every $1 earned.  Are you kidding me?  No wonder we have such a problem with debt, whether it be student loans, auto loans, home loans, or credit cards.

Take some time to soak in the data from the infographic.  The numbers might scare you, but also may not surprise you.  We need a change in our culture and we need it quickly.  If you are in debt and don’t want to be a statistic any longer, then think about joining the Debt Movement!

Overspending in America: Statistics and Facts

Browse more data visualization.

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About the Author Grayson Bell

I'm a business owner, blogger, father, and husband. I used credit cards too much and found myself in over $75,000 in debt ($50,000 in just credit cards). I paid it off, started this blog, and my financial life has changed. I now talk about fighting debt and growing wealth here. I run a WordPress maintenance and support company, along with another blog, Eyes on the Dollar, which is another great personal finance blog.

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88 comments
Money Bulldog says January 21

This really shows the extent of the problem and the reasons behind it. I don’t know if it’s the same in the US but over here credit providers have been slashing credit limits & increasing interest rates across the board. It’s making it more difficult for borrowers to get further into debt but it’s also hurting those who have built up way too much debt over the years, some of them are still overspending but at massively inflated rates.

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    Grayson says January 21

    Yes it does. The overspending problem is bad and this just sums it up.

    Reply
Holly@ClubThrifty says January 21

That is a crazy infographic!!!! Sad but true!

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DC @ Young Adult Money says January 21

Great infographic! I think 1 in 4 having more debt than savings actually isn’t that bad, assuming they are including students and recent graduates into that figure. I don’t know many recent graduates who have more savings than student loans.

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    Grayson says January 21

    I don’t think it is horrible, but it depends on how much debt those 1 in 4 actually have.

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Jacob @ iHeartBudgets says January 21

EWWWWWW! Now, I don’t overspend, but I technically fall into some of those categories, sadly. I spend most all of my monthly money on the necessities. But the difference is, I have a plan. 🙂

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AverageJoe says January 21

I had a client from Ethiopia who told me that when he lived there, he couldn’t figure out how to spend $100 if he wanted to…there was everything he wanted and more on less money. In America, we’ve created this “need” to have more and more and more.

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    Grayson says January 21

    I completely agree Joe. We have also created a society of wants and the need to have things now. This is why we overspend, we feel that we actually “need” these products.

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Andy @ WSL says January 21

Unfortunately I’m not really surprised by this data. It’s certainly sad but overspending is a major issue and I can’t see a time where it ever gets corrected. We’re going to need a MAJOR recession/depression in order to creating lasting change that will impact generations to come. However, I hope it doesn’t come to that…

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    Grayson says January 21

    It will take something drastic. Even when we had the recession in 2008, people started saving and paying off debt, but now 4 years later, people are spending more and saving less.

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Mackenzie says January 21

Wow, I fell into some of these catagories. This infographic is so interesting!

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    Grayson says January 21

    Thanks for stopping by Mackenzie and sharing your thoughts.

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Tackling Our Debt says January 21

I love infographics too and this one says it all. Unfortunately many people do not consider budgeting or watching their spending until it is too late.

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    Grayson says January 21

    I agree Sicorra. Unfortunately, once you pass a certain point, you can’t correct money mistakes.

    Reply
Kim@Eyesonthedollar says January 21

I’m not really surprised. No plan+ ease of credit= rough landing at some point.

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    Grayson says January 21

    Yep. It is getting harder to get credit, than it used to be, but you can still get it. Lenders make their money from people that don’t pay on time. If they lend to people like me (credit cards), then they would just pay me rewards to use their product.

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Anne @ Unique Gifter says January 21

Wow those are some troubling figures! That means on average, people need to cut down their spending by a quarter, just to stop overspending!

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    Grayson says January 21

    Yeah, they are troubling. There needs to be a lot of cutting going on in the US!

    Reply
Joe says January 21

I want to say “unbelievable” but it’s not. I like the icons for each of the money-saving tips.

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    Grayson says January 21

    I agree with “unbelievable”. I enjoyed this infographic.

    Reply
The Happy Homeowner says January 21

Ugh…so sad, yet so true.

Great infographic though; thanks for sharing!

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Jon @ MoneySmartGuides says January 21

Very cool infographic! Sadly, it shows the true state of many American’s trouble with money – spending more than they have and that spending rate increasing over the years. Hopefully more more will become educated on handling their finances better so that the next time this infographic is compiled, it will show better news.

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    Grayson says January 21

    I completely agree Jon. It is a very sad infographic to say the least.

    Reply
Brett @ wstreetstocks says January 21

Your right, these statistics are very troubling. I am shocked to see that Americans spend 1.33 for every 1 dollar they earn.

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    Grayson says January 21

    It is a shocking number, but no more shocking than how much the government spends compared to how much they earn.

    Reply
Catherine says January 21

You should have to pass a test before you can get a credit card, seriously. People do NOT understand the implications of having one.

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    Grayson says January 21

    I would add that you should have to take a test to procreate and many other things that tests could help weed out the stupid.

    Reply
      femmefrugality says January 21

      I love the idea of a test before a credit card! I’ve often thought about the test before procreating. You don’t have to be stupid to fail. Just an a-hole. But alas, I’m ethically against the latter exam.

      Reply
        Grayson says January 21

        True. Good point on that one. Yeah, it rides the line of being ethical…

        Reply
Chris @ Stumble Forward says January 21

Awesome infographic Grayson, I even added it to my Pintrest page. What’s even worse is the savings rate is at a negative for most people as well. What happen to the days when people saved their money and didn’t spend it? Maybe that just me though.

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    Grayson says January 21

    It is sad about the savings rate. It all goes up and down, but it still doesn’t go very high. People just want to spend their money.

    Reply
Canadian Budget Binder says January 22

What an easy to read infographic with lots of information that really puts the problem into perspective for anyone who reads this. Thanks for sharing.

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    Grayson says January 23

    Thanks for stopping by to share you opinion Mr. CBB!

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Pauline says January 22

Great infographic. Having more debt than savings brrrrr…Although I would have expected that people spend way more than before, not just 30%

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    Grayson says January 22

    Thanks for stopping by Pauline. I think the recession has curbed spending somewhat. It will probably increase soon!

    Reply
Laurie says January 22

Every time I see one of these infographics, I just get a sick feeling in the pit of my stomach. What does the future of America hold if we continue down this “live for today” path? I’m not sure I want to know.

Thanks, Grayson, for another educational post!

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    Grayson says January 22

    I agree with you Laurie. It is an alarming trend that doesn’t seem to be going away. We can only be responsible for ourselves and our families these days.

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Tb at BluecollarWorkman says January 22

The average person’s spending has increased 30% in the past 25 years? That’s CRAZY! Why has that happened? Are people more concenred with image than before? Are we dumber than before? Are advertisers doing better than before?

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    Grayson says January 22

    I think you hit most of them right on Tb. More people are concerned with their image and still keeping up with the Joneses. Advertisers are making it look like we “need” products. I do think we are slowly losing our common sense as people lean toward technology use. It is bad.

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Cat Alford (@BudgetBlonde) says January 22

I’m actually really surprised that 50% of Americans set up a budget (even if they don’t stick to it.) Usually when I talk about my budget, people look at me like I have horns sticking out of my head. Still, the only real way I’ve learned to try to beat this sad trend is to regularly tell myself “no” when I want something. Great post, Grayson!

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    Grayson says January 22

    I was surprised that that too. I don’t know if most of them actually use their budget, but oh well. The big issue here is about wants and needs. Many people cannot differentiate between them. Thanks for stopping by Cat!

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Marissa @ Thirtysixmonths says January 22

What makes me sad that at some point, I’ve been guilty of some/most of these things. Really cool graphic.

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    Grayson says January 22

    I have done the same thing. Some of my spending was probably in some of these statistics. I changed my ways though.

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Brian @frugallyminded says January 22

This is a great infographic and I also like a lot of comments here used to fall into the category of biting more than I can chew. I learned my lessons now and I am slowly biting more and leaving some leftovers.

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    Grayson says January 22

    Thanks Brian. I think many of us were in the same boat, but most of us are working our way out of being a statistic.

    Reply
KK @ Student Debt Survivor says January 22

If the feds can’t balance the budget why should I balance my checkbook? Such good role models we have as Americans.

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    Grayson says January 23

    I agree with you KK, unfortunately, the government and companies will just come after you if you don’t pay your debts, but who will go after the government of a super power?

    Reply
Eddie says January 23

Awesome graphic!!!
Like the graphic indicates, less than 50% Americans are budgeting. And I think without a budget, you’re nothing.

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Mike @Personal Finance Beat says January 23

Crazy and depressing post. Individuals are spending more than they earn, and so is our government! When will it stop?

This just serves as a reminder to me that no matter what everyone else is doing, and what’s outside our control, you can still be responsible for your OWN finances and make sure YOU are doing well.

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Shannon @ The Heavy Purse says January 25

Great post. Love the visuals! It is frightening when you think how many people are living beyond their means – and so many are unaware of their spending habits. I wholeheartedly agree with every one of your reasons why people overspend. My father taught me at young age that money was emotional and when our emotions drive our money decisions, our tendency to make poor decisions is higher. He taught me to instead align my money decisions with my values and goals, which I am teaching my girls to do as well.

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    Grayson says January 28

    Your father was a smart man. Those principles are exactly what everyone should follow.

    Reply
Jon A says January 26

Wow cool infographic! It is sad to see this country’s people going into debt over silly reasons like these. We need to stand up and think about our spendings. If everybody cut down on meaningless purchases I think that we would see a turn around.

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Landon Jacobs says January 27

This is a great graphic. I’m personally very responsible with my finances. And yet I have acquaintances who really are racking up a huge amount of debt, living beyond their means and then planning to go into bankruptcy. I think we need to have major financial education starting in elementary and middle school to really turn this around. There’s nothing for this but education.

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    Grayson says January 28

    Thanks for stopping by Landon. I completely agree about financial education early in life.

    Reply
CF says January 28

It seems super scary to me to consider half the population spending more than they earn. Do the debt statistics include mortgage debt?

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    Grayson says January 28

    That is a great question CF. I am not sure if it includes mortgage debt, but with the way things are, I wouldn’t doubt if it was excluded.

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Andrew @ Listen Money Matters says January 28

Wow, awesome infographic Grayson! It’s pretty crazy that most people think taking on debt is not a terrible decision. Everything is “easy payments of $X a month” and people are like wow, I can afford that. The irony is, unless you can pay for it all in cash you can’t afford it and even though you’re too cash strapped to buy it now, you will wind up paying a hell of a lot more over time if you take the payment option!

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    Grayson says January 28

    Right on point Andrew. The advertising in this country makes it so simple to think you can “afford” something, but most people that fall for those advertising tricks are the ones that cannot afford it.

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jefferson @SeeDebtRun says January 29

sweet infographic, Grayson..

i think that accepting what you have and learning to be happy with it is the most important way to escape the cycle.. if you are insisting on living a life of constant upgrades, you will be stuck in a rat race that you cannot win.

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    Grayson says January 29

    You are so right Jefferson. Many people still want to keep up with the Joneses.

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Totio Filipov says January 29

I think the problem of most Americans is spending more than they earn. People should stop relying on credit cards that much and start spending only what they have if they want to regain control. Did you know that in countries like Bulgaria for example, most of the people own their own houses as opposed to getting loans or renting a place? Maybe America should take example from one of those smaller countries. Debt is not a good thing especially if no one bother paying it back.

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    Grayson says January 29

    I agree Totio. Many Americans live well above their means.

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Jim says January 30

Grayson, great eye-opening post, so sad to see we are the Nation of Deadbeats! Our government and the media promote this. Even the poor in this country are consumers, why? cause they are afforded it by the folks in Washington giving it all away for free!

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    Grayson says January 30

    I couldn’t agree with you more Jim. We are in a world of hurt these days and we are not making it better for ourselves.

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D Pew says January 30

I like the tip about carrying enough cash. When you watch the bills slip right out of your wallet it’s harder to spend. It’s just too easy to swipe plastic.

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Deacon @ Well Kept Wallet says February 1

I wish I would have had that stat for the post I just wrote on the habits of broke people. That is crazy that people spend $1.33 for every $1. If it doesn’t change soon, we may see another 2008-2009 re-run.

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    Grayson says February 1

    I believe you are correct Deacon. People’s habits never really change, they might just go in cycles.

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Johnny Moneyseed says February 7

I hate debt with a passion! The problem is that I learned all of these tricks after being a super spendaholic for the first 25 years of my life. It wasn’t until I met my wife where we started eliminating the pile of debt we had both collected. Feels good though to be free, I’ll tell you that much!

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    Grayson says February 7

    Me as well. It makes me cringe just thinking about it.

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Miss T @ Prairie Eco-Thrifter says February 12

This is such a first world problem. We have traveled a lot and in many other areas of the world, spending too much is not an issue. People are content with what they have and they focus on other things. We really could learn a thing or two from them.

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    Grayson says February 12

    I completely agree with you. Overspending is really only an issue is developed nations with larger economies. They thrive on wants and spending.

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Alex @ StockMarketMate says February 13

Overspending is definitely a problem, but hey, it keeps the economy going, and more importantly it puts the Chinese to work. Too bad we don’t pay our people here in the States.

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    Grayson says February 13

    Haha, yeah it keeps the economy going, but on borrowed money that many can’t or have no intention on paying back. Glad we can keep other economies afloat.

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WILD about Finance says February 14

Great infographic, although super scary at the same time. Unfortunately it seems whatever happens in the USA the UK isn’t far behind. Way too many people are spending beyond their means already, such is a spending driven society.

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    Grayson says March 18

    Yeah, we like to bounce off each other, same with Canada. We are all too materialistic and it will drive us all over the cliff soon.

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John @ Fearlessmen says February 15

I also love infographics! Thanks for sharing this one. I was surprised that most American’s spend $1.33 to every dollar earned. I guess I shouldn’t be surprised though cause I already knew many are in debt. The only way that can happen is when one spends more than they earn.

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    Grayson says February 15

    You are in good company. This one took me by surprise but I guess it shouldn’t.

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Doable Finance says February 15

Americans may have all the wealth in the world as a whole populace but they are extremely naive in spending it. Many (read millions) live on borrowed money. They borrow money which they get very easily but they are extremely slow in repaying it. They think they own the world but very few realize they do not.

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    Grayson says March 18

    I completely agree with you here. There seem to be more people that are spending unwisely and that keeps us down as a whole. The US government doesn’t help matters here either.

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Dave@Your Financial Future says March 26

A straight to the point infographic, I like it!

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Chad@thstockmarketandi says October 27

It almost makes you wonder if we should go to a national sales tax concept. No more tax cheating by anyone and we can pretty much do away with the IRS all at once.

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    Grayson Bell says October 28

    We would never create a system that does away with the IRS. They wouldn’t allow that. I think they are trying to create a nationalized online sales tax to make it easier for businesses.

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Sam @ Frugaling.org says January 28

Spending to feel good is something I’ve talked about on my website a bunch. This has got to be one of the greatest psychological temptations. Shopping does really make people feel better; albeit, it’s a temporary fix. Longer term, there needs to be something more than the local Macy’s to make you happy.

Thanks for this terrific post!

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