We're overspending, and we may be in denial about it

By Allison Linn

It?s no secret that many Americans have long relied on credit cards and other forms of debt to get what we want, or what we need.

But a new survey finds that even in the wake of the Great Recession, we may not be?totally honest with ourselves about whether we are living beyond our means.

The survey of about 3,000 Americans finds that about half of the respondents spend more than they earn at least a few months out of the year.

Yet only about 1 in 10 respondents said their current lifestyle is more than they can afford. The vast majority said their lifestyle is about what they can afford.

The survey was conducted by Rasmussen Reports on behalf of Country Financial as part of the company?s monthly measure of?financial security.

Of the people who spend more than they earn at least some of the time, about 36 percent said the primary response is to dip into savings to meet their financial obligations. About 22 percent said they use credit cards to cover the gap, while 12 percent delayed paying the bills.

The good news is that half the people surveyed ? 46 percent ? rarely or never spend more than they earn in a given month.

The difficult economy has had a devastating impact on many Americans' finances, and that has forced some to rely more on credit cards and other forms of borrowing because they don?t have the money to meet monthly expenses.

For many the recession and recovery served as a wake-up call to pare back on credit card debt and get their finances under control.

Recently, however, there have been signs that people are feeling more comfortable again about taking on debt. The Federal Reserve said last week that Americans increased borrowing in March?for things like cars and education, and also used their credit cards more.

Americans also may be living beyond their means because they have less money than they used to. The nation?s median household income has fallen by about 7 percent from its peak in 1999 after adjusting for inflation.

Related:

One in four Americans has more debt than savings

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Do you think you are living beyond your means?

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