The ridiculous reasons so many Americans overspend

FeaturedMoney

Written by:

 

At some point or another, most — if not all — of us have felt the pressure to keep up with the Joneses.

 

According to a new LendingTree survey of nearly 1,600 U.S. consumers, almost 40% of Americans have overspent to impress someone else, especially on clothes, shoes or accessories. Feeling the need to overspend can be frustrating, which is especially true when the stakes are high. In fact, more than a quarter of those who overspent to impress others are currently struggling with debt because of those purchases.

______________________

SPONSORED: Find a Qualified Financial Advisor

1. Finding a qualified financial advisor doesn't have to be hard. SmartAsset's free tool matches you with up to 3 fiduciary financial advisors in your area in 5 minutes.

2. Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests. If you're ready to be matched with local advisors that can help you achieve your financial goals get started now.

______________________

 

 

 

 

Often, the key to breaking bad habits is awareness. We’ll look at how Americans are overspending to keep up.

Key findings

  • Nearly 40% of Americans have overspent to impress someone else, especially on clothes, shoes or accessories (16%) and gifts (15%). Their main reasons for doing so are to feel “successful,” impress family or friends, reciprocate generosity or impress a date.
  • 27% of those who overspent to impress others are currently in debt. An additional 36% previously had related debt. By generation, Gen Xers are most likely to currently be in debt for this reason (34% of whom overspent).
  • The vast majority who overspent to impress others wish they hadn’t. 77% say they regret overspending. To make matters worse, more than a third aren’t in contact with at least one person they previously tried to impress.
  • Americans’ desire to keep up with friends and family turns into financial pressure. Nearly 30% of Americans feel financially pressured to keep up with others, mainly their family (17%) and friends (13%). Gen Zers feel the most pressure (51%). By income, higher income earners feel more pressured than those who make less.
  • Another key form of overspending to impress is not asking to be paid back for money you’re owed. 55% of Americans say they’ve hesitated to ask someone to send their share of money owed, including 28% who didn’t ask to be paid back. By gender, women (32%) were more likely not to request money owed than men (23%).

Nearly 40% of Americans overspend to impress someone

A solid portion of Americans (39%) say they’ve spent more money than they could afford to impress another person. This is especially common among the younger generations — Gen Zers ages 18 to 25 (52%) and millennials ages 26 to 41 (46%). Only 34% of Gen Xers ages 42 to 56 and 25% of baby boomers ages 57 to 76 say the same.

 

“It’s certainly a cliché, but as you age, you’re often less concerned about what other people think of you,” LendingTree chief credit analyst Matt Schulz says. “You get more comfortable with who you are and spend less time worrying about other people’s perception of you.”

Despite the wide variations by age, there’s no gender divide — 38% of men have overspent to impress, versus 39% of women.

 

Why are people willing to overspend to impress others? The most common reasons are to feel “successful,” impress family or friends, reciprocate generosity or impress a date.

Why Americans overspend

“There’s no question that the things we can buy can make us feel better about ourselves,” Schulz says. “That tailored suit, that shiny new car, those designer heels, those first-class tickets — they can bring an adrenaline rush that’s palpable and exhilarating. The problem is that those feelings usually fade fairly quickly, and people are often left with depreciating assets and debt in their wake.”

That said, Schulz says it’s OK to overspend a little on things that genuinely make you feel better about yourself or help you accomplish something you’re working toward.

 

“It’s just important not to overdo it so much that all the positivity is drowned in a sea of debt,” he says.

 

Here’s a look at why people tend to overspend to impress someone.

How Americans overspend on others

Where a gender divide arises is the more precise motivation behind overspending to impress. For example, 41% of men say they did so to impress a date, versus 17% of women. Additionally, women are twice as likely as men to say they overspent because they were afraid or embarrassed to say no (31% versus 15%).

 

Different income levels also have varying motivations. High income earners making $100,000 or more annually are especially likely to admit to overspending to feel successful. In fact, 52% within that bracket have spent more than they could afford to impress others, versus 32% who make $35,000 or less a year. Nearly 1 in 5 high income earners who overspent say they did so in hopes of getting a promotion or raise at work, versus 6% of the lowest earners.

 

Regarding generational divides, Gen Zers and millennials’ main reason for overspending is to feel successful, while Gen Xers want to feel like a better friend or family member and baby boomers want to reciprocate generosity.

Overspending leads to debt, regret

Understandably, overspending can lead to regret. Most consumers (77%) who overspent to impress others wish they hadn’t. This was more common among Gen Zers (85%) and millennials (82%) than Gen Xers (74%) and baby boomers (60%).

The survey findings reveal two potential reasons for this regret: debt and estrangement.

 

First looking at bad feelings surrounding debt, 63% of those who overspent went into debt as a result. That breaks down to 27% who currently have debt associated with overspending and 36% who previously had debt.

Debt from overspending

The other main reason people regret overspending is that 38% of those who did so aren’t in contact with at least one person they were trying to impress.

 

“People could certainly regret the overspending when their efforts to impress aren’t successful,” Schulz says. “If you take on a little bit of debt to show off in pursuit of a promotion, a partner or something else positive and it works, that’s an amazing feeling. But when you go out of your way and maybe even take a little risk to try to accomplish something or impress someone and it flops, it’s tough. It can lead to sadness, anger and regret.”

The pressure to keep up with others is real

We talked about consumers who spent more money than they could afford to impress dates or colleagues, but the desire to keep up with the Joneses often hits much closer to home — friends and family, to be specific.

 

More than a quarter (28%) of Americans say they feel financially pressured to keep up with someone else. Among that group, 17% feel pressured to keep up with family members and 13% feel that same pressure with friends.

 

While family members and friends are the primary people with which Americans want to keep up, this varies by generation. Once again, this drive to compete is more common with Gen Zers and millennials and less with Gen Xers and baby boomers.

!function(e,i,n,s){var t=”InfogramEmbeds”,d=e.getElementsByTagName(“script”)[0];if(window[t]&&window[t].initialized)window[t].process&&window[t].process();else if(!e.getElementById(n)){var o=e.createElement(“script”);o.async=1,o.id=n,o.src=”https://e.infogram.com/js/dist/embed-loader-min.js”,d.parentNode.insertBefore(o,d)}}(document,0,”infogram-async”);

The pressure to keep up with the Joneses appears to decrease over time. For example, 45% of baby boomers say they feel less financially pressured as they age. That said, 45% of Gen Zers say they feel more pressured as they age.

 

To be clear, Schulz doesn’t believe this is just a Gen Z or millennial problem.

 

“Everyone wants to impress from time to time,” Schulz says. “However, many older Americans benefit from the experiences that they’ve had and the myriad mistakes they made in their 20s and 30s, so they may not be as likely to have those same issues going forward.”

More than half of consumers have worried about asking to be paid back money they’re owed

An accidental way to overspend to impress others is not to ask to be paid back for money owed. More than half (55%) of Americans say they’ve hesitated to ask someone to send their share of money owed, including 28% who didn’t ask to be paid back.

More than half of consumers have worried about asking to be paid back money they’re owed

There aren’t surprising age and gender gaps around asking to be repaid. Our survey found that women (32%) are less likely to request money owed than men (23%).

 

A lack of confidence in youth also seems to impact asking to be paid back, as Gen Zers are least likely to ask to be paid back (37% didn’t ask).

 

“So many Americans are terrified of confrontation and avoid it at all costs, even if it ends up costing them money,” Schulz says. “It’s a shame because often you don’t have to do anything more than ask nicely and politely to get your way. It’s usually worth the risk and feeling of awkwardness that comes along with the ask.”

This hesitation can cost consumers. In fact, 30% of those who didn’t ask to be paid back say they’re owed $100 or more. Among Gen Xers, 43% say they’re owed $100 or more, compared with 39% of baby boomers, 27% of millennials and 11% of Gen Zers.

How to cope with the pressure to keep up with others

The pressure to keep up with the Joneses is fairly universal and isn’t likely to end anytime soon. When spending pressures to keep up with friends, family or colleagues arise, these are some ways you can cope that Schulz recommends.

  • Create a budget: A well-planned budget allows you to prioritize spending that matters to you, so you may feel less pressure to overspend. It also lets you shuffle money around when you go off the rails.
  • Refinance and consolidate your debt: Refinancing and consolidating debt can help you dig out of a hole. If you have strong credit, a 0% balance transfer credit card can save you a lot of money in interest. If that’s not an option, a low-interest personal loan can also save you money. “Both can help you consolidate multiple bills into one, streamlining your financial situation and knocking a few items off your to-do list,” Schulz says.
  • Wait on purchases: When you have the temptation to buy a flashy new designer item, a gift or any other kind of purchase, it’s a good idea to walk away temporarily. If you want to make the purchase, there’s no reason it can’t wait a few days or weeks. Chances are, you’ll forget all about it and can save your money.
  • Lean into your support system: If spending pressure has led to debt, remember that you don’t have to tackle it entirely on your own. “Anyone who has wrestled with debt knows how important it is to have folks rooting for you and supporting you emotionally along the way,” Schulz says. “Paying down debt is a really, really hard thing. The last thing you need is to have friends and family pressuring you to spend or making you feel small for working on your debt.”
  • Ask yourself “why”: Before making any unnecessary purchase, ask yourself why you’re making it. Is it because you need something, or that’ll bring value? Or is it because you think buying the item would make you appear more successful, more generous or better in some sort of way? Make sure you’re spending your hard-earned money for the right reasons.

Methodology

LendingTree commissioned Qualtrics to conduct an online survey of 1,577 U.S. consumers ages 18 to 76 from July 26-29, 2022. The survey was administered using a nonprobability-based sample, and quotas were used to ensure the sample base represented the overall population. All responses were reviewed by researchers for quality control.

 

We defined generations as the following ages in 2022:

  • Generation Z: 18 to 25
  • Millennial: 26 to 41
  • Generation X: 42 to 56
  • Baby boomer: 57 to 76

This article originally appeared on LendingTree.com and was syndicated by MediaFeed.org.

 

More from MediaFeed:

How to travel in luxury at a budget price

 

So, you want to know how to travel on a budget? It is easier than you think, and there are some great ways to save money. We have compiled 40 tips for traveling on a budget that will help save money while still having a fantastic experience.

SPONSORED: Find a Qualified Financial Advisor

1. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to 3 fiduciary financial advisors in your area in 5 minutes.

2. Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests. If you’re ready to be matched with local advisors that can help you achieve your financial goals, get started now.

 

DepositPhotos.com

 

Visit places where your money will stretch. When you travel to places where your money goes the furthest, it is easier to save while having a great time.

 

 

Yuliya Padina / iStock

 

A simple travel rewards credit card will help maximize your spending to subsidize travel. These rewards points can make traveling cheap simple.

 

 

B4LLS / iStock

 

Karee at Our Woven Journey says she plans her trips during the off-season:

 

“We plan our trip during the off-season when we want to take a trip but still travel cheaply,” Karee said. “Hotels and flights often take up the biggest chunk of a travel budget, and booking when demand is lower can save 25% or more on off-peak season prices.

 

“Of course, some places aren’t as desirable during the off-season (planning a vacation to the Caribbean during hurricane season can be risky), but booking right after peak season ends can still save some money before seasons are noticeably different.

 

“Another advantage of traveling in the off-season is having fewer crowds. Not only can this make for a more enjoyable experience overall, but prices on excursions and activities are often lower as vendors hope to fill their schedules.”

 

DepositPhotos.com

 

You may find it less expensive to buy a short phone plan while traveling. You can also call your mobile network provider and ask if they offer abroad plans. Many do.

 

 

pixelfit

 

Use Google Flights to track your flight before you book anything. You can save quite a bit by booking on a random weekday many weeks in advance. Google Flights will keep you updated on how fares increase and decrease throughout time. Finding flight deals is quite simple.

 

DepositPhotos.com

 

Tripadvisor will give you many free things to do and places to visit in a major city. You can access most attractions via public transport.

 

DepositPhotos.com

 

If you can stay in a hostel, this will help you shop from the local market and cook your own food.  When you opt out of expensive restaurants, you can cook your own meals while supporting the local economy.

 

Mark at Financial Pilgrimage says to have the food delivered to you.

 

“On a recent trip to Disney, we ordered Instacart while on the bus from the airport to our hotel,” Mark said. “It was our first time ordering from Instacart, so the delivery order was free.

 

“After checking into the hotel and going out for a quick bite to eat, we returned to our hotel with our grocery order at our door. Our delivery driver stopped at Aldi to pick up the items on our list and did a great job communicating throughout the process so we knew precisely when the drop-off would occur.

 

“Instead of spending a ridiculous amount of money on food at the resort, we purchased several snacks, breakfast items, and choice beverages.

Our grocery order ended up being about $80, but it saved us hundreds if we purchased similar items at the resort.

 

“It was such an easy process, and we’ll be sure to use a similar grocery delivery service the next time we travel.”

 

PeopleImages

 

Souvenirs are cheaper at local shops than the tourist traps everyone else is visiting. Budget travelers avoid major attractions and use public transit to find the places locals visit.

 

 

Vladimir Vladimirov

 

Where you are lodging, they probably provide a complimentary glass of water every day. Why spend money on bottled water when you could be putting more money toward your sightseeing? Buy your own water bottle and reuse it every day. I have seen a one-use water bottle cost as much money as a cheap bottle of wine ($10).

 

blyjak / iStock

 

Nearly all major cities have a great local transport system. You will save a lot of money not using rental cars and visiting any significant attractions via public transport. When I was in London, I rode the Tube everywhere.

 

 

santypan

 

Hitting the major attractions and walking around nearby without a plan can lead to finding where locals eat. You may have to go off the beaten path a bit to find these local restaurants.

 

 

Maridav / istockphoto

 

Kayla at Motivation For Mom encourages to create a travel budget.

 

“Getting an idea of how much gas will cost, average restaurant prices, and any extra expenses helps me be prepared on how much the basics are going to cost, so I know how much I can spend on activities and adventures,” Kayla said. “When I haven’t done my research ahead of time, I find myself spending much more on my trip than I had originally planned.”

 

DepositPhotos.com

 

If you are traveling for an extended period, only bring a few outfits. You can always use the washing machine where you are staying.

 

 

MStudioImages

 

Working from home has allowed tens of thousands of people to travel as a part of their everyday routine.

 

 

Vladimir Vladimirov

 

Book everything many weeks and even months in advance. Booking everything last minute can lead to paying twice as much as you should on hotel rooms and will not allow you to find deals or save money.

 

 

DepositPhotos.com

 

Buy souvenirs from local vendors only. This way, you are supporting the locals. The souvenirs are the same price at the chain stores.

 

 

DepositPhotos.com

 

Free breakfast, anyone? The worst-case scenario is they only have coffee and a bagel. You can travel cheaply and keep more money in your pocket by eating free meals.

 

bhofack2

 

Andrew at Wealthy Nickel says, “Take advantage of credit card rewards for things like flights, hotels, and even rental cars.

 

“If you have a good credit score, many cards will give you a substantial sign-up bonus just for opening the card, and then you can earn an additional 1-5% for your regular spending.

 

“Thanks to credit card rewards, our family of four has not paid for a plane ticket in over five years.

 

“I especially like the Chase Ultimate Rewards program, as you have the flexibility to transfer points to many different airline and hotel partners. Last Christmas, we booked four tickets on Southwest to fly home for about 66,000 points – less than the sign-up bonus from opening a single credit card!”

SPONSORED: Find a Qualified Financial Advisor

1. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to 3 fiduciary financial advisors in your area in 5 minutes.

2. Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests. If you’re ready to be matched with local advisors that can help you achieve your financial goals, get started now.

 

DepositPhotos.com

 

Tyler at Relentless Finances says he uses Airbnb to travel cheap and save money.

 

“It is usually less per guest if you are traveling with a larger group than fits comfortably in a standard hotel room,” he said. “Some hosts offer steep discounts for booking out in the future because they want to fill their calendar up ahead of time and know the revenue will be there. They then raise rates as the travel gets closer.

 

“Other hosts work the opposite approach and charge full price for bookings made in advance and start dropping prices as the date of travel gets closer.

It can pay off big to look for this and book your travel when you will get the best rates.”

 

DepositPhotos.com

 

Lisa at Adapt Your Dollars says, “Meal Planning is not just for saving money while at home. It’s also a great way to stay within your budget when traveling.

 

“Opt for renting a condo or house instead of a hotel room so that you can have access to a full kitchen. Take your dinner meals with you when traveling to your destination by car. For example, you could pre-cook your meals, freeze them, and put them in a cooler for transport.

 

“Or you could take the food you need for cooking your meals with you.

Taking food along will save you money if you are heading to a vacation spot that you know is expensive.

 

“Another option is to plan your meals and create your grocery list before leaving home. Then you just have to head to the grocery store (or arrange for grocery pickup) when you get to your destination.

 

“When we head to the beach, we plan easy meals. Some we pre-cook and freeze to take along, while others we cook when we are there. Pre-cooking allows us to spend less on food to have more money in our vacation budget for fun and memorable family activities.”

 

DepositPhotos.com

 

Consider taking a less crowded flight if you don’t mind flying mid-week or off-peak times. Flights are almost always more expensive on the weekends.

 

BrianAJackson

 

My best memories traveling around Europe took place at hostels. You can meet people from all over the world, and it is difficult to find cheaper accommodation.

 

 

DepositPhotos.com

 

Zsolt at Best Axe Guide says, “Sometimes, you can find opportunities for free camping, especially in forested areas. Try this: When you visit a new city, look up parks on google, then look at the satellite image and see if there is any tree cover. If there is, you can use that to remain hidden almost always, without having to pay a dime.

 

“I rarely paid for accommodations while traveling along the West Coast of Canada and the United States with this strategy. Don’t forget to bring your best axe and spare batteries. One of these downsides is that you don’t meet people at hostels, sometimes fun. In addition, if you are storing or cooking food, you need to watch out for wildlife.

 

“Before going on a camping trip, it is good to educate yourself about the local wildlife.”

 

visualspace

 

Keep an eye out for ATM charges. Do your best to find a bank that does not charge for unnecessary items like accessing your own money.

 

 

DepositPhotos.com

 

Keep an eye out for free days at museums. Keep your student ID handy, as many places will let you in for free as a student.

 

 

Paha_L

 

National Parks are beautiful and visiting them costs little money. So many vacation rentals are near the parks.

 

 

TheBigMK / istockphoto

 

Smaller towns have relaxed energy and are much cheaper than large cities.

Plus, there is often less traffic, and you can walk everywhere — a great way to get to know the locals and learn about their culture.

 

Bill Chizek

 

When you’re in a foreign country where you don’t know many people or the environment, it can become dangerous. Don’t be that guy/gal tripping over themselves hailing a taxi.

 

 

nd3000/istockphoto

 

Take a lot of photos while collecting no trinkets. You will remember the experience from the pictures, and the trinket will be broken in baggage claim.

 

 

Karpiak Caravan

 

Working in a hostel could be a good gig if you are at a particular location for any amount of time.

 

SPONSORED: Find a Qualified Financial Advisor

1. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to 3 fiduciary financial advisors in your area in 5 minutes.

2. Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests. If you’re ready to be matched with local advisors that can help you achieve your financial goals, get started now.

 

JackF/istockphoto

 

Cookies (the browsing kind) can cause you to pay more for any bookings.

 

 

DepositPhotos.com

 

Kanye pays more when booking his international tour when his location is Calabassas. If he were to change his location to Wyoming, he’d save a ton.

 

 

Chainarong Prasertthai/istock

 

Simply being flexible with the dates can save you hundreds of dollars. When I was booking a flight recently, I moved the dates by only three days, and it saved me $200.

 

 

DepositPhotos.com

 

Your hotel/hostel has a free walking tour. They are fun, and you can ask your tour guide questions. You will receive an answer from a local resident. That is valuable.

 

 

krblokhin / istockphoto

 

Many credit cards are on the market. I found this out the hard way when I used the wrong card. The credit card company hit me with a 2% fee. Make sure you use a travel card with no foreign transaction fee.

 

 

DepositPhotos.com

 

Ask the front desk or housekeeping staff if they can give you shampoo or soap. The hotel will provide you with the travel sizes that are useful and fit your carry-on bag easily.

 

 

Kenishirotie / iStock

 

Backpacks are easier to carry and do not need to be checked a lot of times. If you can avoid a checked bag – do it.

 

 

vadimguzhva / istockphoto

 

Only bring what you need, not what you want.

 

 

DepositPhotos.com

 

Rent your car from the location a mile away. There is a steep premium renting from the airport location.

 

 

SeventyFour/ istockphoto

 

There are many places to visit. You do not need to stay in a 5-star hotel to enjoy traveling. You can travel cheaply to many major cities that are close to you. Your travel dreams should include some places that are not far away.

 

SPONSORED: Find a Qualified Financial Advisor

1. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to 3 fiduciary financial advisors in your area in 5 minutes.

2. Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests. If you’re ready to be matched with local advisors that can help you achieve your financial goals, get started now.

 

DepositPhotos.com

 

Be flexible, patient, and creative when it comes to saving money – and you’ll be on your way in no time. You can save money while traveling and enjoy your trip.

 

Happy travels!

 

This article originally appeared on MaxMyMoney.org and was syndicated by MediaFeed.org.

 

photobyphotoboy/ istockphoto

 

 

Georgijevic

 

Featured Image Credit: cobrusia / iStock.

AlertMe