Making ends meet has become a challenge for many Americans, especially those living paycheck to paycheck. In one study by Self Financial, 39% of people in that situation said they usually end the month with less than $50, while around 35% reported having nothing left at all.
But what’s at the root of the problem? Experts say it’s about more than a person’s budgeting skills. It could be a combination of persistent inflation that makes spending feel necessary rather than discretionary, subscription creep, an unhealthy reliance on Buy Now, Pay Later services and social-media-driven purchase behavior.
“Addressing overspending from a purely financial perspective is often insufficient. One must delve into the psychological dimensions of their spending habits to enact lasting change,” Khwan Hathai, a certified financial planner and certified financial therapist at Epiphany Financial Therapy, wrote in an email.
Why Are Americans Overspending?
Here are five common reasons experts say Americans are overspending.
1. Social Pressure
“The desire to ‘keep up with the Joneses’ can lead people to spend beyond their means,” Sherman Standberry, a CPA and managing partner at My CPA Coach, wrote in an email.
It can be tempting to buy what you see others buying to signal that you can afford it, too, whether it’s clothes, cars, homes or vacations. Platforms like Instagram, TikTok and Pinterest can make those comparisons even harder to ignore.
“Some may view spending as a form of social proof, associating material purchases with self-worth or status,” Hathai said.
Instead of trying to compete, focus on your own priorities and financial goals. “Having a clear financial goal in mind can help motivate you to stick to your budget,” Standberry said.
2. Lifestyle and Subscription Creep
You may, for example, shop and go out to eat more often after getting a raise. As a result, despite making more money, your discretionary income doesn’t feel like it’s increased.
Then there’s subscription creep, which slowly drains your budget through small recurring charges you forget to cancel or keep because you don’t want to miss out. To prevent this, have a financial plan in place and revisit it whenever your income increases.
“Be honest about your necessary expenses and allocate the funds accordingly,” Standberry said. The goal is to spend intentionally.
3. Emotional Impulse Spending
Many people joke about retail therapy, but emotional spending is real. Whether it’s driven by FOMO, or fear of missing out, or an attempt to feel better after a stressful day, the immediate gratification of a shopping spree may feel good in the moment but can hurt your budget later.
In a recent financial wellness study by Intuit, 45% of respondents admitted that impulse spending has derailed their financial progress in the past.
“Overspending is often more than just a lapse in financial judgment; it frequently signals underlying emotional or psychological triggers. For instance, some people may overspend as a form of escapism, temporarily distracting themselves from stress or emotional pain,” Hathai said.
She explained that by understanding the emotional triggers that prompt overspending, you can develop healthier coping mechanisms that don’t involve reaching for your wallet.
4. Not Accounting for Inflation
While inflation has cooled since its most recent peak in 2022, consumers have been subject to inflation ebbs and flows. Consumer prices rose 4.2% from May 2025 to May 2026, according to the Bureau of Labor Statistics. Tariffs have also played a role in pushing up prices on select items.
There will always be external factors at play, and if you don’t adjust your budget to account for cost increases, you’ll likely find yourself overspending each month. Standberry recommended using budgeting tools or apps to monitor where your money is going.
[Read: This Is the One Thing Americans Refuse to Stop Spending On]
5. Credit and BNPL Misconceptions
You have to repay every dollar you borrow, plus interest and fees. Credit should be a financial tool, not an extension of your checking account. Paying your balances on time also helps protect your credit score.
The same can be true of Buy Now, Pay Later. While these services can make purchases feel more affordable by spreading payments over time, they may also encourage consumers to spend more than they otherwise would. Missed payments may be reported to the credit bureaus, potentially damaging your credit score.
The bottom line is: If you’re having trouble with overspending, Standberry recommended sticking to cash and debit cards so you’ll spend only what you have.
How to Curb Overspending
To gain control over spending and stick to a budget, start by acknowledging your spending patterns and dig deeper to see what may be behind them. For example, if late-night shopping on your phone is your trigger, consider using apps that block shopping sites during those hours.
You can also try these strategies:
— Choose a budgeting system you’ll actually use: There is no one-size-fits-all approach to budgeting. Whether you use an app like YNAB or Monarch Money, cash envelopes or a spreadsheet, tracking your spending can reveal where your money is going and help you identify opportunities to cut back.
— Review your subscriptions regularly: Tools like Rocket Money can help identify subscriptions you no longer use and make them easier to cancel. You can also review your bank and credit card statements yourself, highlight recurring charges and decide which services are still worth the cost. Consider adopting a one-in, one-out rule: Cancel one subscription before adding another. Setting calendar reminders before free trial periods end can also help you avoid unwanted charges.
— Seek professional advice if necessary: If you’re still struggling, consider talking with a financial advisor for budgeting guidance or a licensed mental health professional to address the emotional factors that may be contributing to your spending habits.
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Inside the Psychology of Overspending and How to Stop originally appeared on usnews.com
Update 07/30/26: This story was published at an earlier date and has been updated with new information.
