Personal Finance

Consumers overspend by $7,400 a year. Here are the weekly splurges that cause the most trouble

Key Points
  • The amount that consumers spend each week — not counting bills such as mortgage or rent, utilities, etc. — averages $340, or $143 more than the average $197 budgeted, a survey shows.
  • Some categories of overspending are more common than others, including online shopping, groceries and subscription services.
  • Consumers carry nearly $1.1 trillion in credit card debt, up from $888 billion five years ago, according to the Federal Reserve.

For most households, sticking to a budget is apparently far easier said than done.

Even though most consumers (74%) say they have a budget, 79% of them fail to follow to it, according to research from crowdsourced shopping platform Slickdeals.net.

On average, the weekly amount that people spend — not including bills like mortgage or rent, utilities, etc. — is $340, or $143 more than the average $197 budgeted. That extra spending equals roughly $7,400 each year.

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Many people struggle with overspending regardless of how much they earn, according to certified financial planner Josh Nelson, founder and CEO of Keystone Financial Services in Loveland, Colorado.

"I've heard 'I don't know where all the money goes' from people who make a gazillion dollars and from poor college students and everyone in between," Nelson said.

The survey asked 2,000 adults about their budgeting habits and weekly spending. Topping the list of categories where respondents overspend is online shopping, followed by grocery shopping and subscription services. (And, yes, overindulging on coffee ranks in the top 10.)

While the survey didn't explore how people are funding those extras, credit cards could be a culprit. As of the third quarter, consumers were carrying nearly $1.1 trillion in such debt, up from $888 billion five years ago, according to the Federal Reserve. Separate data from CompareCards.com shows that just 38% of cardholders are "very confident" they can pay their monthly balance in full.

If going over your budget is causing credit card debt to pile up or is standing in the way of your ability to reach other goals, there are some ways to rein yourself in, financial advisors say.

TOP 10 WEEKLY BUDGET BUSTERS

  • Online shopping: 40%
  • Grocery shopping: 39%
  • Subscription services: 37%
  • Technology products: 36%
  • Buying lunch everyday: 35%
  • Household essentials: 32%
  • Coffee: 32%
  • Food delivery: 32%
  • Gym memberships: 30%
  • Entertainment (movies, concerts, etc.): 29%

Source: SlickDeals.net

For starters, make sure your budget is realistic.

"Most people hate budgeting and going through the exercise of figuring out where they're spending their money," Nelson said. "But people end up finding a lot of areas where they can cut back without affecting their quality of life one bit."

For example, he said, you might be paying subscriptions for online publications, games and services that you no longer need.

"Sometimes people don't even know they're still being charged for things they aren't using," Nelson said.

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And if online shopping is a weakness, one trick is to leave the item in your cart for at least 24 hours.

"Chances are it's an impulse purchase," said Jessica Goedtel, CFP and assistant vice president at Valley National Financial Advisors in Bethlehem, Pennsylvania. "By delaying it a day or longer, you give time for that impulse to cool off."

Additionally, don't view budgeting as deprivation, said CFP Eric Roberge.

"What I always tell my clients is that it's not about depriving yourself, or not spending, or being cheap," said Roberge, founder of fee-only financial planning firm Beyond Your Hammock in Boston and co-host of the "Beyond Finances" podcast.

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"Good budgeting is about getting clear on what's actually important to you and then putting your money where your values are," Roberge said.

In other words, he said, align your spending with your values and cut back in areas that don't reflect them.

"By tracking your spending and just paying attention, you're well positioned to make more intentional, mindful choices about your money," Roberge said. "You don't need to deprive yourself, but you do need to be disciplined and focused on what matters most to you."

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