As the director of a financial ministry at my church, I get an up-close and personal look at the spending habits of a lot of people.


And year after year, I am stunned at the decisions people make that get them into financial trouble. I've seen monthly car notes the size of mortgage payments. People take vacations or buy big-screen TVs and expensive jewelry while ignoring huge federal tax obligations.

While it would be easy to judge these people for the messes they've gotten themselves in, I wonder -- even worry -- why they spend so much. Why do they continue to use credit even though they are already weighed down by so much debt? The problem is just as acute with many who use cash. They may not have credit card debt, but they struggle too.

I keep coming back to one question: What has made us into a nation of people who spend more than we earn? It's a question that led Stuart Vyse to write "Going Broke: Why Americans Can't Hold on to Their Money" (Oxford University Press).

Because so many people need to know the answer to dig out of their own financial mess, I'm recommending "Going Broke" for the Color of Money Book Club for March.

In this compelling and wide-ranging work, Vyse explores the history of lending in America, the invention of the shopping cart, the evolution of self-service discount shopping, and the explosion of branding and advertising.

It's not a book I would recommend for people in financial trouble who need a quick fix. Vyse doesn't promise to help you go from broke to an automatic millionaire in 10 easy steps.

Relying on psychology and behavioral economics, he analyzes the many influences that rob consumers of their self-control. He doesn't, however, absolve people of their wasteful spending habits.

There really are two sides to why so many Americans overspend.

"Part of the problem is simply a matter of how we think about money," Vyse writes.

For example, we buy in bulk, thinking it saves money. But often it leads to more consumption and bigger waistlines, Vyse says.

The other part of the problem is our economy's reliance on personal consumption. On some level, we all know our buying is out of control, but we are constantly bombarded with messages encouraging us to shop. The steady stream blunts our reasoning power.

We don't even have to leave our homes to consume -- thanks to the Internet and toll-free retail lines, Vyse writes, it has become possible to spend in many more places, at any time and in any way.

We're made to think cash is an inconvenience.

Just consider the advertising campaign, "Life Takes Visa." The credit card giant has been running commercials in which people are hustling through checkout lines at fast-food and retail stores.

They buy what they want by merely waving or swiping their plastic Visa cards.

But when a customer pulls out cash, everything literally comes to a screeching halt. The cash-paying customer gets harsh looks from fellow shoppers and the cashier. Then we hear an announcer say: "Don't let cash slow you down."

The commercials are funny. But the subliminal message isn't.

It's diabolical.

"Much of the difficulty stems from new retail technologies that make it easy to act without thinking," Vyse said.

What happens when we don't pause to consider our purchases whether paying with plastic or cash? What's the long-term effect of our overspending? We've created a new kind of poverty, Vyse says. We now have people who should have adequate income but still struggle because they're laden with debt. Or they can't weather an economic storm because their overspending has left them with no savings.

Vyse sees a continued instability in our economy.

"A nation that is maxed out on debt and does not save is asking for disaster," he said. "The current foreclosure crisis is just the latest way Americans have found to spring a leak. The house used to be the replacement for a savings account, but that escape valve is gone for now."

To break the cycle of being broke, we have to understand how we got to where we are, Vyse says. Only with this self-awareness can people start holding on to more of their money.

Michelle Singletary is a columnist for the Washington Post. E-mail her at singletarym@washpost.com.