10 Reasons People Spend Consistently More Than They Earn

Why do so many people spend consistently more than they earn? They fall deep in debt, their quality of life plummets, they retain their cherished buys, but do not enjoy them fully. Sadly, they believe seductive lies merchants put forth while peddling goods.

For over twenty years, I have been working with mainly churched individuals, couples, and families on personal financial matters. Many were in deep debt, concomitant stress, and joyless for long periods. Some emerged debt free in different time periods, while others stayed trapped in the debt cycle. During this time, I noted specific attitudes and behaviours that led some people out of debt, and attributes that appear to keep some folks trapped.

10 Reasons people spend consistently more than they earn
10 Reasons people spend consistently more than they earn

10 Reasons people spend consistently more than they earn

Particularly, I noted ten reasons many folks seem to spend consistently more than they earned, and so, they remained stuck in a debt cycle. However, one significant observation surprised me. Folks who chose to stick to only some of the items on the list, never had sustained success as others who followed all of them. So, it was not good enough to set a goal, do a budget, and plan for emergencies alone. Instead, folks needed to be alert to all items to crawl out of debt and stay out.

  1. Ignore consequences of decisions
  2. No process to decide to spend
  3. No budget
  4. Easy credit
  5. Herd mentality
  6. No accountability
  7. Anticipate funds
  8. Emotional satisfaction
  9. Instant gratification
  10. Ignorance

1. Ignore consequences of decisions

Folks spent, PERIOD! They were not concerned with the effects of spending. Indeed, they didn’t think about how this spending might reduce their ability to do something else later. They considered nothing but spending to get the current item. But when they realized how much debt they incurred, they started the blame and victim games. Folks, let’s never forget this Benjamin Franklin quote: “He that is good for making excuses is seldom good for anything else.” 

2. No process to decide to spend

People who remained in debt did not think it was necessary to follow a spending decision procedure before spending. They saw this as time consuming and unnecessary. Still, without a process to help you look at alternatives, including the alternative of not spending, you will let situations lead you. And you will end up with debt for a long time–a debt sentence.

3. No budget

Most folks I see do not want to budget. Moreover, they do not want to learn about a budget because they believe it is a strait jacket.  But a budget is nothing more than a guide to help you get to your goals in a stress free manner. We don’t know the future so it will likely be wrong. But we need to go through the process. The late Dwight D. Eisenhower puts it this way: In preparing for battle I have always found that plans are useless, but planning is indispensable. 

To be sure, the budget is not a constraint. You prepare it. You implement it. The budget helps you consider opportunities and challenges in a future period so you might prepare to deal with them now. Often folks tell people to budget and all will be well. However, that’s just part of the journey. We need to review and update budgets and plans regularly as events change. And they do change.

In the budget, we can plan and save for emergencies that will arise. We don’t know when, but we know they will arise, so we should plan for them. According to Warren Buffet, “Do not save what is left after spending. Spend what is left after saving.” A budget is the best tool to help you do this.

4. Easy credit

It’s easy to get credit. And it can be cheap. Besides, it’s invisible money, so people spend confident they can make a small minimum payment for years. Indeed, I have seen folks with over seven credit cards, juggling monthly payments over long periods. I am not against having one credit card provided we convert it to a check. Sadly, many people focus on fixing credit scores and not fixing their attitudes and behaviour. These folks spend consistently on credit and end up with invisible electronic ankle bracelets reflected by intense emotional stress.

5. Herd mentality

Keeping up with the Joneses’ has never been easier. People follow their friends, family, neighbours. However, they forget two critical matters. First, their neighbours et al, might be deep in debt with no outward sign. Second, the neighbour might be at a different life stage where she can afford to buy that new car for cash.

Here is my paraphrase of a relevant quote from the late Adrian Rogers: Just as you upgrade to catch up with your neighbour, he upgrades again.

6. No accountability

Folks spend and spend and spend and do not account to anyone. In families this can be a huge issue. Husband or wife spends while the other is distracted, then voilà!, reality hits and the other party realizes the couple is broke and doomed for a long debt sentence.  We should always remember we are spending God’s money and we will have to account for our stewardship. Romans 14:12 (ESV) reminds us, “So then each of us will give an account of himself to God.” We need an accountability partner to help us stay on course to do His will.

7. Anticipated funds

Your boss promises you a raise and a bonus. Immediately you leave her office you spend it on goods you yearned for. Before the raise and bonus materializes, the company is in trouble and you are laid off. Ouch! You can’t return the items; now, they are yours. That’s why it’s crucial you never spend funds before you get them. Apostle James reminds us that God alone knows the future in James 4:13-15 (ESV):

Come now, you who say, “Today or tomorrow we will go into such and such a town and spend a year there and trade and make a profit”— 14 yet you do not know what tomorrow will bring. What is your life? For you are a mist that appears for a little time and then vanishes. 15 Instead you ought to say, “If the Lord wills, we will live and do this or that.

8. Emotional satisfaction

Some folks spend to boost their image. They feel good after buying that new dress or new car (yes, a car, I have seen that a few times). They had a rough morning, or tough week and go strolling in the mall, and without thinking, they buy stuff on credit. Reality hits much later.

9. Instant gratification

We want that item now. Not tomorrow, not next week, now! That’s the society we live in. We hear it always. Why wait? The merchant says if you wait the price will go up. To be sure, there is always a sale, so you shouldn’t react to that hook. Often, waiting means you get something better and more effective for your purposes. Mull over Walter Mischel et al’s marshmallow experiment in the 1960s and 1970s. It showed that delayed gratification pays significant life benefits.

10. Ignorance

Ignorance comes in many forms, but the main area I see is people spending to save. So many folks believe they are great handling money because they get many deals. They are proud to tell you how they saved 50%, 70% on major buys. Sadly, they don’t realize that buying in these sales mean they spent; they saved nothing. Another area I see is people not reading the fine print. These folks get trapped with cell phone contracts, TV arrangements, and other contracts where understanding aspects of the fine print is crucial. The third ignorance area is people buying extended warranties whenever it’s offered. Research shows consistently that for most items, buying an extended warranty is wasteful.


I believe sincerely, if folks reflected on these ten items, and examined their situations, they might not spend consistently more than they earn. Indeed, they might decide that minor attitude adjustments will help them spend consistently less than today. And they might be able to get off the debt cycle, sooner rather than later. Let’s meditate on this profound Elise Boulding’s quote:

Frugality is one of the most beautiful and joyful words in the English language, and yet one that we are culturally cut off from understanding and enjoying. The consumption society has made us feel that happiness lies in having things, and has failed to teach us the happiness of not having things.

© 2016 Michel A. Bell

More like this:

Personal Finances: Credit Scores to Debt Freedom

How to Stop Living Pay Check to Pay Check

Effective Stewardship as you get out of debt

Michel A. Bell

Michel A. Bell is a former senior business executive, author of six books (including Business Simplified released in 2018), speaker, and adjunct professor of business administration at Briercrest College and Seminary (Briercrest). Michel holds a masters of science in management degree from Massachusetts Institute of Technology and an honorary doctor of business administration from Briercrest College and Seminary. He is founder and president of Managing God's Money, a private mission devoted to teaching biblical stewardship.

2 thoughts to “10 Reasons People Spend Consistently More Than They Earn”

  1. I think that you hit the nail on the head. There is no such thing as a get rich scheme or free lunch.If you want to build a solid online business, it would take hard work, dedication and lots of time.At the end of the day, it will be all worth, if its financial freedom you after. I look forward to checking out your site and learning more. Regards Roopesh

  2. I spend to save sir. I save nearly 50% percent of the income God has graced me with. It goes into before tax saving vehicles and after tax saving vehicles, awaiting His direction. I understand the draw of the next big widget, but also realize that that is all a lie.

    Thank you for this website. It helps me to understand even more my stewardship responsibilities and how I can’t just put them on autopilot. God wants me to be an active participant.

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