Why Are You Spending More Than You Make?

There is no escaping the fact that Americans like “BIG” from the Big Mac to the Big House and Big Car. We either have, wanted to have, or work towards having those things as our goals in life. Because of that single fact, Americans spend and spend their money and, oh yeah, it’s money they may not even have! Today, as consumers, we acquire more than double of what we did about 50 years ago in material goods.  That translates to an average retail credit card debt per household in the USA today of over $8,000 per family. This begs the question: why are you spending more than you make?

Are you spending more than you make? We all have that tendency and here are 7 reasons why we are triggered to spend, spend, spend.

I have to laugh a little now talking about this subject. After all, I’m no different than you. I think I used to be obsessed with bigger is better and more, more, more just like most of us have over the years at one time or another. We seem to have that idea in our brains almost from birth. It continues to find ways into our lives all the time, for example just last month, McDonalds introduced a bunch of new Bigger and Better (I guess only time will tell if they are actually better) big sandwiches that border on the ridiculous! In fact, they’re big and also budget-bustlingly big. It’s certainly not uncommon these days to see prices at fast foodies as high as $7-$8 each.

But beyond the obvious like bigger and more expensive food, there is a lot more to this story. Being obsessed with spending and accumulating loads of stuff shows a fundamental weakness in us that we just don’t like to admit. Did you know that today, the personal storage industry is a $32.7 billion revenue business as of 2016? It’s a fascinating fact that we are storing things in droves that we bought and that we just can’t or won’t ever use. I know you have things in your closets, garages, and maybe even under the bed in your home that haven’t seen the light of day for years, and that’s bad enough. But when you are actually paying for space someplace in a storage facility that you may never have a use for, then that becomes the point of absurdity. That space and money could be being used for far more important pursuits that could free us of debt and make our lives better. So why is it that we don’t do just that?

Why You Are Spending More Than You Make

Here are 7 reasons why we spend more than we make:

1. We think “things” make us secure

Security. We know that if we have a roof, clothes, food, and transportation, that makes us feel secure. Logically then, if we have more of all of that and even more then we will feel even more secure. Unfortunately, it doesn’t quite work that way. Physical possessions will fade, spoil, and eventually disappear. The “security” we want to believe in just isn’t true and the feelings don’t last.

2. We think “things” make us happy

No one admits that they pursue material things to make themselves feel better and happy (sometimes to the point of illness). But, the truth is that we all seem to buy when we are sad or depressed. We think new, bigger, and better may just make us feel better for at least a little  bit. That feeling though quickly disappears and then where are we? Probably in debt and still needing something else to make us feel better it seems.

3. We saw it on TV

OMG, how many commercials do we get bombarded with every day about the newest cars, trips to the Caribbean, and special sales from new clothes to home improvements?  We are exposed to over 5,000 ads a day on TV, radio, internet, magazines and other types of media and we are very susceptible to it. Almost every ad we hear and see basically has the same message: “Your life will be better if you have _____ in it”. We hear and see it so often that we actually start to believe it and then BOOM, here comes that credit card as fast as you can say “charge!” The first step to break this chain is just being aware of what the ads are doing to you. That’s why so many recommend never buying on impulse. I certainly don’t and when you have a little time to think about your purchases you generally make better decisions.

4. We like showing off

It’s the old “keeping up with the Joneses” thing or even more so, keeping ahead of the Joneses. We all simply like being the center of attention. Most of us have a great need to show off. It helps us feel that we have influence, power, and success. That’s why we spend so much more than we have. It may be an illusion of success, but we seem to enjoy living in that illusion.

5. We are just plain jealous of others

It is in our nature to envy others and to want what they have or even have more and better that what others have. I’ll go back to the TV and the advertising and blame a lot if it on that in our lives. No matter how little money you might have, you probably have a TV set and what you see on there looks mighty tempting. It sort of sends a signal to your brain: if others have that than we should too!

Supersized TVI think that’s why they make 100+ inch TVs today. They’ve become a phallic symbol for a lot of the men I know in their “man caves” chock full of every electronic creature comfort there is in the world. It’s a competition and sometimes we buy just because our friends did.

6. We try to overcompensate for our deficiencies in life

We look to project confidence in the clothes we wear and the car we drive. When we are lonely or sad a lot of us shop and try and fulfill ourselves with material things. It seems we are trying to impress others with “things” rather than who we really are as people. The worst part of this is that we never really achieve that goal, but rather the buying is merely a distraction from our feelings that ultimately prevents us from really addressing them. There are many ways to deal with those feelings, but spending money you just don’t have isn’t a good one.

7. We are much more selfish that we want to admit

We may not want to admit to the fact that we are selfish and even greedy, but history has shown that to be true when it comes to the human race. Most of us seem to want to increase the size of our personal kingdoms and this is borne out throughout the past by coercion, force, dishonesty, and even warfare.

Excess material things will ultimately not enrich our lives. Having what we need and not the excesses we pursue gives us more time to enjoy life. The sooner we come to realize that, the better our lives become.

Have you realized that material things do not solve all of you needs in life? Are you a big spender? Do you live within your budget or are you staring at credit card debt because you need to expand your kingdom? What are you doing with now that you can really do without?

Image of television courtesy of LG on Flickr via CC 2.0


  1. Emily @ JohnJaneDoe

    Jon and I were just discussing this, not in relation to us but in relation to a relative who, though middle-aged, still spends like a teenager…almost entirely on impulse. And, she’s being enabled for now, but at some point, the enablers will no longer be around to allow her to do so.

    Life will become drastically different at some point, and we are afraid for her. While we hope it’s in the far future, it’s more likely to be within 5-10 years.

    TV is an issue. Not just commercials, but also shopping channels and the often unrealistic lifestyles that are shown on TV. So does Facebook and being around friends who have more.

    But the biggest issue that gets her in spending trouble seems to be a disconnect between the reality of her situation and income and her perception of what she’s “worth.” In her head, she’s upper middle class (if not upper class) trapped in a working class job and income. She’s never been able to shift her tastes and habits to reflect her reality.

    And I think that’s, unfortunately, all too common, particularly with some downward mobility. People grow up expecting to have things better or at least as good as their parents, but when they don’t, they can find it hard to let go of some expensive tastes.

    It can be difficult to be content with lesser circumstances even when you try to face up to them, but a lot of folks aren’t even trying to adjust.

    1. Emily, I think you have analyzed this situation very well. There are probably too many factors that create the thinking that many have and the impulse to spend. I’m not sure that advising someone who is so far out on the edge to change their ways will work, but if it’s someone you care about, it may be worth the attempt to help. I have a similar situation in my own family of someone who’s very close to me, but I have not yet been able to effect any behavior changes. But for some reason, I keep trying. Thanks for sharing.

  2. Great post, Gary!

    Getting rid of cable took away the introduction of new “things” via ads. What a difference that makes!

    I have to tell you something I’m really proud of. My employer gave me a $500 Amazon gift card when I retired (nice, huh?). After six months I’ve only spent half of it. The first few months I spent nothing. I finally broke the ice with a “splurge” on a $20 purse. I see things I like and I put them on my Wish List and delay the purchase. I find I don’t buy most of the stuff I thought I wanted.

    1. Congratulations on using such good judgment on what amounts to a free gift of $500. Personally, as I’ve gotten a little older, I find that my wants have diminished and I concentrate more on my needs. I’m not saying that I don’t occasionally make a fun or silly purchase, but I’m certainly not tossing any money away as I did when I was a kid. I also want to say that I admire you for giving up your cable. I haven’t yet been able to do that…I’d certainly miss the baseball games if I did. Thanks for your comments.

  3. #4 and 5 I believe are big factors today and have been for years. We are always trying to live someone else’s life, or impress someone. We really just need to stop caring so much about what other think and focus on ourselves. Stop playing the comparison game on social media with others. It’s just one big highlight reel anyway.

    I like having less stuff today. Less to organize, clean, store, lose, etc. When you shift your focus to yourself you can find happiness within, no latest gadget will ever fill that void.

    1. I guess writing this post for some people is like preaching to the choir. So many others out there just don’t get the idea that building your finances is not a competition. The benefit in your own life is what we all should be most concerned about, that is taking care of yourself and your family, providing the things that they need for today and their future. Whether or not the Joneses are doing well should not be our concern. Thanks so much, Brian.

  4. Keeping up with the Joneses is such a tough situation for most people. Even people who aim to be frugal have trouble being “different” and choosing not to have all the stuff their peers do. It is uncomfortable to have to explain your decisions when people ask questions. It takes practice to go against the flow and avoid the 7 reasons for overspending you outline here!

  5. All good points and we all can fall into the trap. You know sometimes I see the commercials and think that gadget would be nice to have. It’s usually one of those time saving gadgets. I just say if they have it at the As seen on T.v. store in the mall I’ll get it. Well that mall is 30 minutes or more away and we don’t get there very often. Thanks goodness. by that time I have forgotten what I deemed so important! Delaying purchases really helps!

    1. Vickie, sometimes I wonder how they fit all that “as seen on TV” stuff into one location! I’m not against spending per se, but only for what I really need and occasionally for a want. It’s just a matter of discipline, especially when you have limits to what you can spend. And those limits affect pretty much all of us.

  6. Troy @ Market History

    Although I’m a relatively big spender, I don’t think I waste any money. I go on quite a few vacations each year and always eat healthy, home cooked meals. What else is money for if not to provide a good quality of life?

    1. I am also a true believer in money aiding in the quality of your life and certainly when you can afford to have the luxuries that you like, there is nothing wrong in doing so. The problem that I often see is that people really cannot afford to spend freely and do so anyway with the aid of credit. That can spell big trouble. Thanks for your comments, Troy.

  7. I’m not so guilty of we saw it on TV as I am of a Facebook or Pinterest ad getting to me. It’s how I wound up with a stupid expensive pair of shoes that aren’t even comfortable. But as advertising gets more and more targeted, it can be really difficult to ignore.

  8. To me its all about value based spending. Spend on the things in a thoughtful manner, and save the rest. There was a time when I was very subject to the issues you mentioned. At that time I’d look back after the purchase and realize I made a mistake making the purchase. That doesn’t happen very often anymore, but it took years to get to this point.

    1. I don’t think you’re alone, FTF, when it comes to going through the process of learning to make better decisions about your spending. I think when you’re younger and especially after you get your very first job, you’re somewhat overwhelmed with the ability you have to actually buy things on your own. After that is when you start to understand that long term goals require better money decisions and I’m glad that you’ve learned it and I hope others will as well. Thanks for your comments.

  9. I don’t think the general population realizes how much we are being marketed to nearly every minute of our day: from the way physical stores are set up to how ads are served to us based on our online activity. It takes a fair amount of awareness, and a bit of willpower, to decide that keeping our hardearned money and invest it for income later in life is our true focus.

    1. The concept of targeting us by our habits online or even just the way we walk around a store is really a science. It’s almost unfair that we are so susceptible to manipulation. You’re right about us having to really concentrate on how we spend our money and how we plan for our future. Thanks for your comments.

  10. Holly

    I’m actually taking a fb break right now. If I meet friends in person and hear about their good news, all is fine. But if I go on social media and I’m bombarded with tons of pics showing expensive vacations, new kitchen renovations, someone’s new car or RV purchase..it just starts to seem overwhelming and I really feel like there is great temptation to overspend to match everyone else’s “highlight reel” that we see on social media.

    1. As much as I’d like to think that social media is just a positive, realistically I have to agree that everyone shows off and brags. Throw in the targeted advertising we see on top of it and the temptations are enough to make anyone spend more than they have. Taking a break sounds like a good idea, at least every once in awhile, so you can calm those impulses down. Thanks for sharing.

  11. Hey Gary,

    Interesting read coming from your perspective because I’m a Canadian. From what I’ve seen, heard, and read, personal debt is a problem up here too.

    Quote from above, “Because of that single fact, Americans spend and spend their money…”

    And it makes me wonder, because it seems everyone on earth wants to tap into the USA market.

    Imagine if every United States citizen all of a sudden became extremely frugal and never spent a cent on anything that wasn’t necessary.

    My guess is a complete collapse of the world economy. A massive depression. I’m not Robert Reich (not even his go-for) but that’s my guess.

    You know more about this stuff than me from what I’ve read here – what do you think would happen? (not trying to give you home work for the weekend) 😉


    1. Here’s what I think. I don’t think that could ever happen, especially because for years I have had the opinion that products (and services) are made with the intention of planned obsolescence and thus, replacement. For example, the way technology has made almost everything that you buy necessary to replace in a short period of time. Things like smartphones and computers. So I think it’s safe to say that people will continue to spend and spend and spend and our economy will never cease to reap that benefit. Thanks, Brent, for your comments and question.

      1. That makes sense. I remember watching a movie the other night set in the early fifties and the characters were walking through a hardware store.

        I said to Betty those products probably lasted for decades or forever.

        The other day I found one of those old classic brass hose nozzles half buried in the alley.

        I cleaned up the threads and tried it out. It did leak a wee but it still worked great.

        Really though – my hypothetical question was on the ridiculous side – no way people are going give up there “stuff”.


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