Overspending is nudging consumers toward bankruptcy

On Behalf of | Jan 1, 2020 | Bankruptcy

A budget is an important tool for managing personal finances. Many people in Connecticut already use budgets to track their bills, daily expenses and spending habits. This is an excellent habit that even more people should take advantage of, but it is not necessarily enough to conquer debt and avoid bankruptcy.

Research from Slickdeals shows that 74% of consumers have some kind of budget. Although it is great that so many adults are trying to budget their income and expenses, it may not be all that useful. According to the same research, 79% of people with a budget never seem to be able to stick with it.

Outside of bills, the average adult budgets $197 for spending. The amount that most people end up spending is $340. Spending an extra $143 per week is a fairly noticeable difference, especially since it adds up to an extra $7,400 or so every year.

So where is all that extra money going? A lot of consumers struggle to identify where their money is going, but another survey sheds some light on that question. Online shopping is one of the biggest areas in which people overspend. The average person is also spending too much at the grocery store and on subscription services.

Consumer debt jumped $888 billion from 2014 to 2019, leaving people with around $1.1 trillion of debt. Since only 38% of people with credit cards feel certain that they can make their full monthly payments, things are not necessarily looking too great for the average consumer in Connecticut. Whether carrying too much debt because of overspending, medical bills or unexpected expenses, bankruptcy can help most people discharge their debt.