I'm writing a thesis statement for an essay on why people have trouble living within their means....?

I think this might be a better approach for you. When I help people tackle a budget, they often have no idea what they're earning and spending. I think this is the biggest problem for people trying to live within their means. Often times, when I take all of their income sources and balance it against all of their expenditures, they are genuinely shocked. I think a lot of it has to do with a lack of education, not that these people are stupid, just that they've never been taught, on how to balance a check book, etc. Also, the rise in the past decade of credit cards and the "devil incarnate" debit cards. That's still not all of it, but a huge portion. Roughly 30% of the people I help, go back to overspending within 5-10 yrs.

Good Luck with your paper!

When a CPA dreams of winning the lottery, he dreams of what the after-tax cash flow winnings, not what the jack-pot is.

I do not think they over estimate, i think they have no idea what they can afford to spend. Some examples for you of what some of my clients have done:

Single man looks throught he Sunday Ads to see "what he could buy".

Women plans a $3,000 vacation and have no cash available to pay for it and no cash to take with them.

Retired lady says she worked 40 years and needs 4 vacations a year while retired.

Future Grandma spends $$ for daughters shower but can not pay her electric bill that month.

Pay only the minimum balance on credit cards and wonder why the balances are so high

Get every major credit card and at every store there is.

Most people have no financial goals, they do not plan for emergencies, they do not save for their annual expenses, They have no concept of cash flows. They feel that if they work full time they can buy what ever they want, if they do not have the cash for it, put it on a credit card and pay for it later, but it is never paid for.

Most have no idea what they actually earn, that is what they take home. Once they see cash they blow it on the first thing they see. They see road that is divided and take the one that looks the best to them, but it always results in a dead end.

There are also those who feel that they should live in the lifestyle that they should be in, or were in. If there are changes in family (more kids, health, kids in college) they do not adjust for it.

Changes are not made for the effect of the market/economy. Look at when the price of gasoline goes up, people do not cut back on their driving, they stay the same.

The number one reason for bankruptcy in the USA is due to major medical expenses, which are always unexpected.

Some think that because they make more $$ they will also be getting a paycheck in relation to a what they usually get, what they do not realize is that they may be in a high tax bracket and will get less then they anticipate.

GOOD LUCK WITH THIS ONE.

You can use the fact that most people forget to calculate in what the government will take from them as well as any union dues or uniforms expenses. Also a lot of people forget to take into account that bills for heating and cooling their homes varies throughout the year and since many people have the money taken directly out of their accounts they often write checks at stores that will bounce because money has already been removed from their account. Hope this helps a bit.

Over-estimating expected earnings: They spend what they expect to make. Figured in overtime, forgot about taxes taken out.

Under-estimating spendatures: Cell bill higher then expected. Car insurance due.

Unexpected expences: Medical supplies, (medications), Car problems, B-day presents, etc.

overestimating your expected earnings could mean society tells them that they will earn a lot by the government providing statistics and encourages people to go to college and further, government encourages them to take loans (all kinds, including federal loans), etc.

Credit card forms are distributed in the college book stores so that students graduating will have money to buy new clothes and transportation for when they start jobs...but people sometimes use the credit card to pay cell phone bills instead. Meaning people don't set their priorities, or they never got an allowance from their parents and don't know how to use money wisely. Or the schools don't teach kids early on how to use their money wisely (there is no course for that).

Students don't realize that when they apply for a job that they will be applying for the same job with 1500 other students, that they need to have a "specialty" in addition to their degree to get that job, or to get that specific job for that extra income to arrive.

When people look at the suggested income figure that a specific job offers most of the time all they see is dollar signs in their eyes, and they don't figure that they may have to pay their own insurance, would need a dependable car, that they would be expected to dress up on the job, that maybe they would have to travel and the cost of gas is high, the cot of car maintenance is high, rents and insurance has increased (on rentals, homes and vehicles). They need to think about the taxes they will pay out, and must now plan for a Roth IRA for their retirement.

When people come out of college they think the earnings will be a lot so they think they can buy the biggest car, the best clothes, etc. and they do it on credit cards...and the high interest kills them...plus, if you reneg on one credit card then ALL of your credit cards will DOUBLE the payments you need to pay them. Most of us never plan on that happening. In addition checking accounts go awry when people are busy with other things on their minds, and the cost of those fees can kill you too. And eventually people end up in bankruptcy. A new laws say you cannot only not get your student loans paid off, but you cannot get all your debts washed out like it used to be in the past. So it really takes a lot of knowing ahead what you will face when you apply for a job and what salary you need, but it takes skill on that person's part to know math well.

Just as when you start a business you need to fo a 5-year business plan "before" you start. It would be good to have a college course wherein a student would have to plan out their lives for 5 years after graduation. That plan would include all the expenses they would need to pay out, and from that they could determine what salary they need. If what they have to spend does not equal the salary they could possibly earn (think about the lowest income they could get) then they should continue schooling while taking a part time evening job until they could reach the figure that they could earn (from their new education) to be able to pay for themselves before applying for any career job.

Some people think that after they get their career job they can forget about saving but invest in a house, a girlfriend (and buy her lots of gifts to convince her), then they immediately marry and a child comes along, and they're sunk. It's the expectations and fast living, and what they see their peers doing that they want. What they don't realize is that what older people took 35 years or more plus skrimping and saving to achieve, new grads think they will have that in a couple years of earnings and that's not true. Perhaps it's good sales tactics that has gotten them to feel this way, good media coverage, other people getting into debt and not caring about their future but the grad only sees what those people have and they want it too. What they don't realize is that those people are bankrupt, losing their marriage, family, car, house and job.

Aside from that, people don't think about unexpected bills, such as medical, if you have no insurance coverage and a lot of people don't. They don't think about having to put new tires on a car, car repairs, buying clothes. And everyone wants to take a vacation, but we seldom have the money saved up to do it, so we use our next paycheck to go on vacation. Then, you have to play "catch up" on the rent, phone, lights, etc.

People fail to make (AND MAINTAIN) an accurate budget. That is, keeping track of exact amounts of money coming in and money going out. Without doing that, it's a guess and people tent to guess wrong on the neoconservative side.

Bottom line ...... Lack of discipline.

How effective is advertising at planting the notion you need to keep up with, or surpass the Joan's.

sorry i would help, but this is making me use to much of my brain