Study: Americans Are Fine With Their Overspending
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 Financial. The 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 afford.
Families make budgets but don't stick to them
On a positive note, the survey found 51 percent of respondents had a household budget 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 situation."
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 habits.
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
- Borrowed money: 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.