To overspend means to spend more money than you planned to or more than you can afford. When you overspend, you go beyond your budget, like bringing $20 to the store but buying $35 worth of games and snacks.

People overspend in different ways. You might overspend at a birthday party by getting carried away buying arcade tokens. A family might overspend on vacation by eating at expensive restaurants every night instead of planning some simpler meals. Governments can overspend when they spend more money than they collect in taxes, creating debt that future taxpayers will have to pay back.

The key to understanding overspending is recognizing the limit you've exceeded. It's not about spending a lot; it's about spending too much relative to what you have or what makes sense. Someone who saves their allowance for months and then spends it all on something they really want isn't overspending. But someone who spends next month's lunch money on video games today definitely is.

The opposite of overspending is staying within your budget or, better yet, underspending, which leaves you with savings for the future.