How Americans are Spending Their Excess Cash


It’s no secret that Americans love to spend their cash – and we have plenty of debt to show for it. A recent survey by found that almost half of all respondents saved less than $10,000 for retirement.

This raises the obvious question: where is all the money going?

Part of the problem is that it’s so easy to get credit. Even if you have bad credit, you can still find a lender to provide a loan at a high interest rate. Even after filing for bankruptcy you can usually still get credit, although it will cost you.

It’s also clear that Americans tend to spend money on discretionary items like entertainment and other non-necessities – often in amounts north of $5,000 a year. And dining out alone costs most families in excess of $2,000 a year – money that can be saved, invested, or poured into a debt relief plan and used to knock out bad debts.

Not to mention, there is enormous pressure to “keep up with the Joneses,” constantly upgrading our lifestyles each time we come into more money or our neighbors level up.

This is why so many Americans end up turning to debt relief programs for help – because they get so steeped in their consumer debt, they often feel there is no way out.

Fortunately, there are ways to break this cycle of damaging spending.

Shut down your discretionary spending

Set a budget that provides some allowances for fun outings, as not allowing yourself any leeway won’t be sustainable. But don’t bury your head in the sand when it comes to your expenses: Be honest with yourself about what you historically spend on discretionary or nonessential items and commit to cutting that number down.

Spend based on need, not income

Just because you earn more doesn’t mean you need to spend more. Getting a raise doesn’t mean you should go buy a more expensive car because you can suddenly afford it. Until you meet your financial goals, only spend money on what you truly need, rather than what you want or what you feel entitled to.

Prepare for your future rather than dwelling on your past

If you’re in a difficult financial position and find yourself in need of debt relief, that’s okay. However, focus on completing your debt relief program, then shift your attention to preparing and saving for your future rather than dwelling on your past expenses. Once you’ve completed your debt relief program, start using the money you were spending to pay off your debt to instead save for retirement or to simply build up your nest egg.

You don’t have to become a miserly penny pincher to develop responsible financial habits – but it is important to understand why Americans get into so much trouble with overspending and debt. By taking an honest inventory of your own spending habits, you can rise above this trend and enjoy the rewards later in life as you approach retirement.