Pitfalls that can lead to spending beyond your means

There are many ways for individuals to determine if they're spending beyond their means. One such avenue is to determine the level of consumer debt they're carrying, which could be an eye-opening metric for millions of people.

According to the Federal Reserve Bank of New York, credit card balances rose by $27 billion in the second quarter of 2025, ultimately reaching $1.21 trillion. Though millions effectively manage credit and thus use it to their financial advantage, others struggle to keep their heads above water after accumulating large amounts of consumer-related debt. And such debt is not the only pitfall that consumers can look to avoid in an effort to spend within their means.

· Failure to budget: A failure to budget can make it hard to know how much is coming in and how much is going out. Budgeting is a financial strategy embraced by consumers across generational lines, as a recent poll from NerdWallet found that 83 percent of millennials, 67 percent of Baby Boomers and 74 percent of Gen Xers adhere to a monthly budget. Those who fail to embrace budgeting may not save much money and thus be more likely to accumulate debt when unexpected expenses arise.

· Failure to save: Budgeting and saving go hand in hand. Budgeting helps people avoid daily overspending, and it also helps people finance costly expenditures like travel and big-ticket purchases by facilitating saving. A failure to save money leaves individuals with no financial safety net, which can force them to use high-interest credit cards to pay for significant expenses like home repairs and medical bills. When credit card balances are not paid in full each month, the resulting interest charges can quickly add up and even exceed the initial expense.

· Impulsive spending: According to CapitalOne Shopping Research, 36 percent of consumers indicate the majority of their purchases are unplanned. Impulse buying has long been an issue for many people, but it might pose an even bigger threat now. That's because smartphone shopping apps mean the next purchase is never more than a smartphone swipe and click away, which is perhaps one reason why CapitalOne reports the average consumer made 9.75 impulse buys per month in 2024. Smartphones are here to stay, but consumers concerned about their ability to resist impulse spending can turn off shopping app notifications and opt against storing credit card numbers in shopping apps and on websites. The added inconvenience of being asked to enter personal information each time you make a purchase might compel some shoppers to spend less impulsively.

Increases in consumer debt suggest many people are struggling to avoid various pitfalls that can lead them to spend beyond their means. A concerted effort on the part of consumers to right their financial ships involves recognition of the various pitfalls that can threaten their financial security.