Half Of Americans Are Spending More Than They Earn, But Don't Realize It: Survey

Half of Americans are spending more than they earn, according to a recent study.

We need to come to terms with our spending habits.

About half of 3,000 Americans polled in a recent survey said that they're spending more than they earn at least a few months each year. However, just 10 percent said they were living beyond their means, according to the survey by Rasmussen Reports for Country Financial released on Tuesday (Hat tip to MSNBC.)

Part of the problem may be that a lot of Americans don't see saving as part of their lifestyle. Half of those surveyed do not set monthly savings goals for themselves, according to the Rasmussen survey. Of those who are spending more than they earn, 36 percent are dipping into savings, 22 percent use a credit card and 8 percent are borrowing money in other ways.

It's perhaps not surprising that a lot of Americans don't make the connection between overspending and financial risk. Schoolchildren don't learn much about personal finance, and many people find themselves with certain blind spots in their knowledge later in life. Just 44 percent of Americans understand that a credit score measures the risk of not repaying a loan, rather than their debt or financial resources, according to a survey by the Consumer Federation of America released earlier this week.

Only about half of those surveyed by Rasmussen said that they have a monthly budget.

To be sure, many of us are still shaking off the effects of the Great Recession and some are in tight spots. Americans are saving less partly because they're just not making as much money as before. The median annual wage in the U.S. fell to $26,364 in 2010 -- its lowest level since 1999, according to Reuters.

Still, the issue of inadvertent overspending is a pressing one, since a growing number of Americans are buried in debt or have no savings. As of last year, almost a quarter of all families had no liquid assets, meaning savings that can easily be converted into cash, according to a recent study by the University of Michigan. That number has been on the rise in the past couple years. Meanwhile, 10 percent of families had more $30,000 in debt as of 2011, up from 8.5 percent of families in 2009, according to the study.

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Comments

[Cyberfox]

09:05 AM on 05/22/2012

Liberals call you greedy if you save for your retirement, college education, etc. They think the gov't should confiscate everything and redistribute it. If they strip me of much more, I am going on the dole.

[conal6]

08:31 AM on 05/19/2012

My wife and I follow Dave Ramsey's program, Baby Step 4 for all you believers, and we save. I'll be the first to admit its not easy and there are a lot of sacrifices.One thing I have never understood is why there aren't more incentives to save, like a higher interest rate on savings, the way I look at it is that the way society is structured they want you to be in debt with little savings. Sometimes fighting the power isn't a protest, but not going with the flow. Try Dave Ramsey it works for my wife and I. Even if your not religious it still works our charity is NPR!

[Cyberfox]

09:07 AM on 05/22/2012

Congratulations!!! As someone who has been there and gotten out of the debt burden, I want to encourage you to hang in there. Hubby and I are down to just a house payment now and we have money to fulfill some of our dreams. It feels real good. It doesn't take long, hang in there and life will be good.

[KarmaPatrol]

02:41 PM on 05/18/2012

Many got burned as their homes and stock-market holdings took a dive during the crash of 2006-2008. It affects the psyche, evidenced as most missed the bull market from 2009-early 2012. Yet demographics mean social security and medicare will get leaner ... unless there's a steady undertow of dollar inflation. More about boiling bondholders like a frog, slowly with no pain, than anything abrupt (Note: this is not bond speculators who are just betting).

[db71]

12:44 PM on 05/18/2012

They took a page from the government's operations manual.

[MB1East]

12:21 PM on 05/18/2012

When I moved out of my parents I quickly went into debt. I was living above my means and it scared me to live paycheck to paycheck and live on credit. Once I reached an income level where I could pay off that credit I made it a goal to always live below my means. I make sure I can pay off all of my bills, including credit cards, each month. My car is 10 years old and runs fine. My friends keep leasing new ones, but I will wait until it completely dies, and then buy something I can afford with saved up cash. Credit and loans make it way too easy for people to live above their means. We should appreciate what we can afford and try to live within that limit, whatever it may be.

[shortguy54]

12:53 PM on 05/22/2012

I used to buy cars and drive them until they "died". I lease a new one every three years now, and it's a much better deal: the car is always new and there are no maintenance costs at all.

[lightningbolt]

11:56 AM on 05/18/2012

The cost of living is increasing while wages are stagnant or decreasing.  Even those who save have their savings eroded by inflation.  The 99% is being drowned and robbed by the 1%.

[Troyhe98]

01:06 PM on 05/18/2012

You are blaming the "1%" because you can't budget?

[lightningbolt]

01:37 PM on 05/18/2012

I can budget just fine.  I'm just pissed that my money devalues every day.  They're stealing my money!

[thomas paine]

01:07 PM on 05/18/2012

Come on, not everyone in the 1% (includes Jon Stewart, Warren Buffett, President Obama, etc.) is robbing and drowning the 99%. Statements like that just enable conservatives to call class warfare and convince people they're right.

[lightningbolt]

01:38 PM on 05/18/2012

Of course, not all of the 1% are robbing us, many of them are.  Even Buffet admitted that there is class warfare going on, and the rich are winning.

[scvblwxq]

03:39 PM on 05/18/2012

Around half of the billionaires thought raising their taxes was a good idea.

[lightningbolt]

11:55 AM on 05/18/2012

Not only are lots of people not saving, but those who do save have their savings eroded by inflation every second of every day. Inflation is theft. Inflation is caused by the privately owned Federal Reserve who's member banks make a profit from inflation, essentially transferring your wealth into their pockets continuously.

[Figerre]

09:46 AM on 05/18/2012

I find it interesting, all this talk about the lack of American savings -- consider this - if costs continue to rise and wages don't -- talking about saving is a pipe dream. Everything you buy has risen in cost...with the same salary coming in...savings is a goal but hardest to reach.

[smoknjoe]

09:59 AM on 05/18/2012

Exactly. Nicely put.

[Kasado]

10:07 AM on 05/18/2012

Then stop spending. Does the 52" LED TV have to be on constantly, does every other meal have to be at Mc Ds, don't buy SUVs, don't spawn multiple overweight children, restrict Walmart visits to once a month, turn off lights when not in use, restrict your diet, occasionally ride a bicycle for transportation, don't live 50 miles from work and STOP creating excuses for your excessive consumption based lifestyle.

[VictoryBlue]

11:20 AM on 05/18/2012

What a clueless response to a well constructed comment. If the costs of groceries goes up higher than you get paid, should you just stop eating? You are making assumptions about people you know nothing about. Not everyone is going out and buying T.V.s, going out to dinner and buying cars. Some are just trying to get by on what they make and are watching prices go up and out pacing their pay.

[thomas paine]

01:21 PM on 05/18/2012

One area where you seem to be misguided is that healthy food is generally more expensive.

Most will agree people, on average, eat too much and buy unhealthy food but when the government subsidizes the ingredients of fatty processed food and a person has a limited food budget (some people are actually poor) they can easily end up with a bad diet. Everyone needs calories to function but if one can buy 1000 of them for $5 vs. 250 for $5, usually the higher number is going to win even if those calories are less healthy.

[nypapajoe]

09:22 AM on 05/18/2012

Our ATM charges us crazy fees, credit cards crazy interest rates which keep going up, loans is even worse if you can get one with good credit! Wall St and the Banks ATM is the Federal Reserve for members only No interest rates regardless of the loan amount! These same financial wizards get to serve on the very board that regulate them! These same financial institutions have lost hundreds of Billions and continue to engage in the same tactics involving derivatives that got them into trouble the last time We Bailed them out! Morgan just lost another 2 Billion Dollars plus but the CEO who serves on the very Bd. that over sees his company says that they made a mistake? This is only possible when you have an entire Republican Congress protecting your financial interest because these same politicians surely are not protecting ours! These people have nothing but contempt for the very system that enabled them to enrich themselves!

[Carlos Lomba Jr]

08:58 AM on 05/18/2012

use to be me...now I own nothing to noone....very liberating....you find you have more money when you don't have extra bills to pay....I actually save some now....yeah me :)

[Wurkenstiff]

09:44 AM on 05/22/2012

It's not easy but I am getting there.
Everything is more expensive today for sure and no, it is no fun telling people you can't go out because you are trying to get out of debt. Being disciplined is never easy and often times painful.

[Kasado]

08:33 AM on 05/18/2012

Most people maintain the false illusion that if times get REALLY difficult that the federal government will be there to bail them out with their massive safety net no matter how large the deficit grows.
So why save for the future, live an austere lifestyle, minimize debt, or concern theirselves with health when Unc' Sam will be there to save them from their own excessive behavior.

[VictoryBlue]

11:21 AM on 05/18/2012

You mean like the banks did?

[wzjussayin]

11:51 AM on 05/18/2012

You both make great points. What a mess. As a society, we aren't respecting money - as though it's a forbidden topic of discourse.

[Kasado]

12:06 PM on 05/18/2012

The banks and investors fed off the gluttony of the average American and should have been allowed to fail.

[scmucas2001]

07:17 AM on 05/18/2012

Good to see that the financial "crisis", which was really more of a correction, has taught us nothing. Keep living life for your financial overlords!

[local21]

06:56 AM on 05/18/2012

I just mailed my Visa bill yesterday and have $ 0 debt as of this morning, no mortgage, no car note, no loans. I still have to stay on a budget to pay for property taxes, health/auto insurance, home maintenance/repairs, retirement savings, and a rainy day.

If you don't stay on top of your finances you are going to pay for it one way or another.

[rnl52]

10:19 AM on 05/18/2012

I paid everything off, sold the house, moved to the philippines......now I can travel, my medications cost 10% of what they did in the states and my property taxes are $150.00/year. The new American dream.

[cajnjewel]

02:11 PM on 05/18/2012

You are fortunate, but isn't it a damn shame you had to move to the Phillipines?

[greeneyes51654m]

02:17 PM on 05/18/2012

I too have a house in the Philippines in Laoag, Illocos Norte but the wife and I only live here 6 months out of the year, the other 6 months in San Diego. It's true that everything is cheaper here except gasoline, but the healthcare is not good even if it is cheaper.

[xrepublican]

04:21 AM on 05/18/2012

More proof that Americans lack basic math skills.

How many people have credit card balances they can never repay?

How many took out mortgages they could not afford? It's not THAT hard to do the math....

[JojoHomefries]

12:32 PM on 05/18/2012

JP Morgan Chase is pretty bad at math too.

[xrepublican]

03:25 AM on 05/23/2012

Not at all.... profits they keep - losses we get stuck with. (and while we worry about hundreds and thousands, the big guys don't worry until you get into many more zeroes)

Math for the rich and powerful is not the same as math for ordinary people.

[progressivestance84]

03:12 AM on 05/18/2012

$26,364 for average American worker. Its a disgrace.

[UseTheWholeBuffalo]

11:28 AM on 05/18/2012

The only way out is to pretend they only make $26100.36, and put $263.64 in savings. That's $21.97 a month. When that gets comfortable, pretend income is $25836.72... then $25573.08.