10 Reasons People Spend More Than They Earn Consistently

Why people spend  more than they earn consistently? Seductive lies merchants set forth while peddling goods seep into their subconscious. They sink deep in debt as their quality of life plummets; they keep their cherished buys, but do not savor them.

For over twenty years, I worked with churched people, couples, and families on personal financial matters. Many were in deep debt, stressed, and joyless for long periods. A few people emerged debt free in different time periods. Others stayed trapped in the debt cycle. During this time, I noted specific attitudes and behaviors with mixed results. A few people became debt free, several folks stay trapped in debt.

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

10 Reasons People Spend More Than They Earn Consistently

I noted ten reasons many folks kept spending more than they earned although stuck in a debt cycle. But, one notable observation surprised me. Folks who did not heed items one to ten below, never experienced sustained success as others who did. It was not good enough to set a goal, do a budget, and plan for emergencies alone. Folks needed to take to heart every item to crawl out and stay debt free.

  1. Ignore effects of decisions
  2. No spending decision process
  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! Effects of spending didn’t bother them. They didn’t consider how current spending might reduce later choices. Nothing but the present counted. But when they realized how much debt they incurred, they started the blame and victim games. Folks, let’s never overlook 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 they needed to follow a spending decision procedure before spending. To them, this approach was time consuming and unnecessary. Still, without a process to help you look at alternatives, including the alternative of not spending, you will let events lead you. And you will stay in debt—a debt sentence.

3. No budget

Most folks I see don’t  budget. They do not want to learn about a budget because they believe a budget is a straitjacket.  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 the events won’t unfold as we expect. Still, we need to follow a process to help us review opportunities and potential pitfalls. 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. 

The budget is not a constraint. You prepare it; you follow it as needed; and it helps you consider and prepare to handle future opportunities and challenges. Often folks say, budget and everything will be well; but, that’s incorrect. Budgeting is only part of the journey. We need to review and update budgets and plans as events change. And they 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. Warren Buffett says, “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 the smallest payment for years. I have seen folks with over seven credit cards, juggling required payments over long periods. I am not against having one credit card provided we convert it to a check. Many people focus on fixing credit scores and not fixing their attitudes and behavior. These folks spend on credit and end up with invisible electronic ankle bracelets reflected by intense emotional stress.

5. Herd mentality

Keeping up with your neighbor’s lifestyle has never been easier. People follow their friends, family, neighbors. But, they forget two crucial matters. First, their neighbors et al., might be deep in debt with no outward sign. Second, the neighbor 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 neighbor, 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 emotional and relational issue. Husband and wife spend with no coordination, 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. When you leave her office, you commit it on goods you crave. Before the raise and bonus materializes, the company lay you off with other employees. Ouch! You can’t return the items; now, they are yours. That’s why it’s crucial you don’t commit funds before you get them. Apostle James cautions 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

Folks spend to boost their image. They feel good after buying that new dress or new car (yes, a car; I have seen emotional buys of a car a few times). The couple 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 today’s society. We hear it always. Why wait? The merchant says if you wait the price will rise. Sales happen every day; don’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 with finances. For instance, I see people spending to save money. Folks believe they are great handling money because they get deals. Several people brag that they saved 50% or 70% on major buys. But few realize that buying in these sales meant they spent, but saved nothing. Another area I see is people not reading the fine print of agreements they sign. These folks get trapped with cell phone contracts, TV deals, and other contracts where understanding aspects of the fine print is crucial. The third ignorance area is people buying extended warranties. Several research shows that for most items, buying an extended warranty is wasteful.


If folks reflected on these ten items, and realized their conditions, they might not spend  more than they earn consistently. They might resolve that minor attitude adjustments will help them spend less. And they might get off the debt cycle, sooner 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 seven books — including his first children's book published in 2022 — speaker, and adjunct professor of business administration at Briercrest College and Seminary. Michel is a Fellow of the Chartered Certified Accountants (UK), holds a Masters of Science in management degree from Massachusetts Institute of Technology and a Doctor of Business Administration honoris causa from Briercrest College and Seminary. He is founder and president of Managing God's Money™ and Stewarding God's Resources.

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

  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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