'underspend' originates from English, formed by the prefix 'under-' (Old English 'under') meaning 'below' or 'less than', combined with the verb 'spend' (from Old English 'spendan', ultimately from Late Latin 'expendere') meaning 'to pay out'.

'underspend' was created in Modern English by combining 'under-' + 'spend'; the past/past-participle form 'underspent' follows from the irregular past of 'spend' (Old English 'spendan' -> Middle English 'spenden' -> modern 'spend').

Initially formed to mean 'to spend less than (an amount or allocation)', and it has retained that basic meaning into modern usage.