10 Reasons Americans are Living Well Above Their Means

Young kid holding a lot of shopping bags and smiling.

Living above one’s means is one of the most significant contributing factors to America’s growing financial dilemma. Over 60% of Americans are living paycheck to paycheck. According to Reddit, here’s why. 

1. Americans Seek Instant Gratification

“A survey discovered that 61% of Americans couldn’t afford to pay a $1000 unexpected bill. It’s because so many people live above their means, and more people should be willing to delay gratification,” one person noted. 

“Americans want something, and it can be at their door same-day. They’re not thinking about their net worth and future because it looks bleak without money. But they keep spending the little they have.”

2.  Americans Thrive On Consumption

“Consumption equals status in a lot of communities. Your value is tied up in what kind of products you own, what you consume, and what you do. People are inherently status-conscious and inevitably try to play that game.”

“Conspicuous consumption (enhanced by social media) is a low-effort way to claw some social status,” another commented. 

3.  They Are Stuck Living Paycheck to Paycheck

“Our receptionist at work is a young mom, 22, maybe with a one-year-old. She lives with her boyfriend’s parents and just recently took out car insurance on her own.”

“She was bugging out two months ago because she accidentally paid her monthly bill twice and would now be scraping by until payday. So has no financial plan, or budget, and she lives paycheck to paycheck,” another explained. 

4.  Lack of Financial Discipline

“Once you get behind, it’s tough to get back in the green, and sometimes you feel like it will never happen, so why not get a new phone if you can swing it right now or get a payment plan? Americans are advertised to constantly, and people fall into the consuming trap because of it,” another stated. 

5.  They Don’t Teach Financial Literacy

One person replied, “Many people are not taught how to save, invest, spend, etc. I give all my credit to my parents. Once I turned 16/17, they explained credit to me and helped me open accounts.”

“They taught me at a young age that money is always an investment, no matter what you buy. Most are not taught this and end up spending everything since they have yet to learn any better.”

6.  Cars Are So Much More Expensive

“Cars are insane. I paid $20k for a used Honda Civic, and it felt crazy expensive to me. My coworker bought a new 4-Runner at the same time.”

“We make the same salary, and he spent more than twice. Six and seven-year loans are more common so that people can afford vehicles. It seems unsustainable,” shared one. 

7.  Homes are Bigger Than Necessary

“I’ve lived my entire life in apartments and would love a smaller home on a decent-sized plot of land, maybe somewhere in the woods and set off the road a bit, but I never find that.”

“Instead, it’s always gigantic houses with three bathrooms, four bedrooms, etc., on no land, on a busy road, with neighbors right there, and all for a huge price tag,” another admitted. 

8.  They’re Hanging Out in the Wrong Circles of Friends

“It’s all about your social circle. I’m 30, and all my close friends have jobs making 80k+. I know of some people, however, not making as much but don’t regularly interact with anyone I would consider poor,” another suggested. 

9.  Everything is on a Monthly Payment Plan

“The way that monthly payments are the norm. I feel like I live in a bubble from reading a lot of financial planning subreddits and blogs, so I’m always surprised to see furniture and cell phones bought on a monthly payment,” someone expressed. 

10.  They Are Trying To Keep up with The Joneses

“Stay in your lane, don’t try and compete is a good mentality I learned from my parents and other family members who made fiscally responsible decisions,” one stated. “I would rather look like someone poor but in reality has money in my account than look wealthy and in massive debt.”

What do you think? Did Reddit get this right, or is something significant missing from this list?

Featured Image Credit: EdZbarzhyvetsky /Depositphotos.com.

This article was originally published on Ash & Pri.

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Pri Kingston

Ash & Pri are the Founders of AshandPri.com and have spent the last decade building their way towards financial freedom and a lifetime of memories. Having successfully achieved their early retirement goal in under 10 years, they look forward to sharing their financial sense with like-minded people. Read more about Ash & Pri in the 'About Us' section.