An original analysis of the BLS Consumer Expenditure Survey shows that almost 40% of U.S. households spent more than their income in 1990. Multivariate logistic regression indicates that income level is the most important factor related to whether a household overspends. More educated consumers are more likely to overspend than are less educated consumers, when income and other factors are controlled. Key Words: overspending, budgeting, financial ratios

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