Top 12 Dumbest Spending Habits Forcing Americans into Bankruptcy

There's no denying the fact that Americans love to spend money. The bigger, faster, sleeker, and shinier something is, the better - and in all likelihood more expensive - it is. This line of thinking is what leads so many people into the kind of unnecessary debt that is serious enough to scare off creditors and sometimes even employers. The need to show off some new gadget or piece of furniture to your peers to gain their respect and approval is natural. It's how we as Americans have come to fend for the leadership of our respective packs.

But it is also impractical because we don't live in the animal kingdom and we have the ability to reason. Simple analysis will show you that you shouldn't buy something if you can't afford it. And yet people continue to compile debt with their spending habits. The following are 12 of the most unintelligent ways that Americans dig themselves into personal insolvency, in no particular order.

Dining Out

One of the biggest wastes of money is going out for food on a consistent basis. There's nothing wrong meeting your friend at the local salad bar for lunch every once in a while, but it can add up fast. Who cares about the looks you get for brown-bagging it at the office? If you want to start cutting corners, you're going to have to get used to the amount of rubbernecking you'll receive from others. For dinner, why not stock up on pasta and rice? Fruit and vegetables are usually - excuse the pun - dirt cheap and a simple stir fry recipe can be both more filling and healthier than whatever is on special at the Olive Garden. The more you cook for yourself at home, the more you can learn and experiment with different kinds of foods. You can use this knowledge to invite people over for dinner instead of going out and in the end, save everybody a little money.


Buying a car is a big investment and can hit your wallet harder than you think. By the time you're done figuring out whether you want the moonroof or the sunroof, you haven't even factored in gas money and your first payment shows up in the mail. There are a lot of unnecessary costs and upgrades with new cars and most of them aren't worth it. If there is a two year old lease model of a car that you like that doesn't have a ton of miles on it and is in very good shape, chances are you can get a great deal on it. So what if it doesn't come with the new GPS system that you'll never figure out how to use. In the end it's saving you money and the car will last just about as long as the current model. Also, and you've heard it a million times before, but if it's possible, ride a bike or walk instead. If you've already bought and paid for your car, at least you can save on gas and get a little exercise.

Buying something because it's on sale

There's nothing wrong with getting a good deal on something when it's on sale. However, the point of a sale is to entice you to make additional purchases. In your mind, you're saving a little bit here and redistributing the extra money to other things. This logic is flawed, because you're not saving any money, it's just been shifted around. Stores want you to come in excited about the sale because there's a good chance you'll buy something else at full price. If you're going for the sale, keep your purchase focus on the sale products only and whatever else you actually need. Don't compensate and make up for saved dollars.


Even if you think you don't smoke all that much, you're still smoking too much when considering the price of cigarettes. With taxes continually on the rise, this habit is costing smokers more and more and it's adding up. Take a look at how much you spend weekly on cigarettes and think about how much you can save if you cut back by maybe a few packs here or there a week or perhaps a few less cigarettes a day. You don't have to quit, because everyone knows how hard that is to do, but would it kill you to scale it back a bit? You might actually feel a little bit healthier, and this could potentially help in the long run, both financially and medically.


It is important to a lot of people to look good and it's certainly imperative to feel good, we can all agree on that. But at what cost are you getting your daily amount of exercise? Do you take full advantage of that $30 monthly fee you're paying to Globo Gym or do you only make it once every couple weeks? You certainly have every right to spend your money any way you want, but you can get a perfectly good workout by doing something as simple as running around the neighborhood. Or maybe spend that gym membership money on an affordable weight set or machine. This could save you a lot down the road, including on gas money.

Being late on credit card payments

Having a credit card is fine if you can make your payments on time. If you can't, and continue to be late, be prepared to slowly kiss your good credit and sanity goodbye. Letting those interest rates soar can have stiff penalties that can haunt you when trying to secure a loan, buy a car or rent a house or apartment. Make sure you know what is in your limit as far as your budget goes, and always assume that a certain amount of your money has to go to what you're going to owe. Credit card debt caused by missed or late payments can hurt you deeper than almost anything else on this list.

Excessive accessories

It's been common among women to practice the art of accessorizing for many years, and more recently the metrosexual agenda has been causing men to do the same. There comes a point, however, when you have to ask yourself, Do I need a different pair of shoes to go with every shirt I own? Well, do you? You know the answer is most definitely no, you do not, yet you continue to sink a portion of your paycheck into multiple hats, purses and belts. Maybe the Egyptians were right and you can take it all with you into the afterlife. But as far as we know, all of the trinkets you own equate to little more than those Christmas tree lights that get thrown away with the tree every year. Treat yourself every once in a while, but don't go overboard.

Charging it

Don't spoil yourself by thinking you can pay off something later when you're not entirely sure that you can. Take advantage of your debit card and use it instead of your credit card if you don't like using cash. That way you know that there is at least a lower limit to what you can spend. This forces you to keep an honest eye on your account, which is a good habit to pick up. Credit cards make people feel as if they're worth much more than they actually are, and that is a seriously dangerous thing.

Impulse Buying

A lot of times you'll buy something that is on sale because you think that you might not get such good deal on it any other time. Maybe in your head you get so overwhelmed with the idea of having some sort of doodad or that you've always wanted said doohickey and you finally decide to buy it. Impulse buying does nothing more than show that your need/want priority is out of whack. Buy something when you can afford it, not because you have to own it. If you want it so badly, save up for it and buy it when you can, not when you can't.

Losing control

Be moderate in your overall spending, no matter how much you're making. Mike Tyson didn't lose his entire fortune by cutting corners. He and other celebrities who have fallen from grace obviously didn't understand that their wealth was unlimited. You have to avoid doing the same thing on a much smaller scale. Don't go all out every time you buy something new. Instead, think about your future and spend your money more reasonably so that you're more comfortable later on in life. It's more important to struggle while you can so that you can live easier in the future. Keep in mind that every time you buy something more expensive than you can afford, you're only hurting yourself. A new car is nice, but if buying one forces you to eat nothing but Ramen Noodles, you might have to rethink your spending habits.

Not keeping an eye on your money

Paying attention to your funds is extremely important, and yet a decent amount of people fail to do so. Little things like balancing your checkbook or just taking account of what you have, what you owe, and what you're spending your money on can help you out more than you might imagine. If you step back and take a look at your total financial situation, it might make things a little clearer to you. It's possible you could see that you need to save a little more money or cut your spending in certain areas. Staying on top of your funds isn't only important, it's intelligent. You can save yourself a lot of frustration and financial woes if you understand what you can spend and where you should spend it.

Being "iPod'd" into something

If you haven't seen an iPod commercial, you haven't watched TV in the past five years or so. They're everywhere, they're sexy, and everybody should have one. Right? Well that's debatable. The real question is: can you afford one? You obviously don't need one. iPods don't monitor your glucose or dispense asthma medicine for you and they certainly don't make your life any better. Being "iPoded" into something means you've been swayed by a marketing campaign or public opinion to buy into a luxury item. If you save for it or your income allows for you to afford this item, great. But a lot of times people are suckered into getting something like an iPod because the general public deems it "cool". A lot of times these products end up being more or less flashes in the pan and when you've spent money you don't really have on them you end up getting burned. If you do want something and you don't want to wait and see if it is really worth it, save your money and pay for it all at once when you can.

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