Half of all Brits are overspending by almost £150 a month, according to a new study by Aviva.
The research also found nearly half (42%) see credit and overdraft facilities as an extension of their bank balance, with 60% admitting they could do more to stay in the black and one in seven saying they never put money aside.
While 40% say they overspend because they don't earn enough to cover their living expenses, one in 10 of those surveyed spend more than they can afford simply to appear better off than they are, with almost a quarter overspending so that their children don't go without.
The internet (35%), mobile phones (25%), annual holidays (23%) and a night out with friends (19%) are listed among the things Brits would not want to do without, regardless of their bank balance.
And millions of Brits are not putting money aside for their pensions, with just over 55% contributing to a pension, paying an average of £105 per month. Others (42%) say they don't have any spare cash or are too busy paying off their debts (17%). One in 10 consider themselves too young to start paying towards retirement.
Tim Orton, product director for Aviva UK Pension & Investments, said: "It has been a tough few years for people financially. Money has been tight, but worryingly, rather than cutting back, it seems there are some who are continuing to live way beyond their means.
"Whilst it's reassuring to see that more than half of those surveyed are making regular contributions to a savings or pension pot every month, there are a still a large number of people who are overlooking these important financial priorities."
He added: "Making some small changes to our spending can have a big impact on the pot of money we end up with in retirement. Simply taking lunch to work each day or not buying a morning coffee can equate to £20 per week, £80 per month, £960 per year or the equivalent of more than £40,000 over an average working life."