American spending habits have taken a clear direction.
Among the many changes arising from the pandemic, one of the most noticeable was a change in American spending habits.
A survey released in March 2021 by Pew Research shows that Americans have increasingly chosen to put away what extra money they have rather than invest. It spreads across all income levels, with a 32% increase of wealthier Americans saving more, 17% more for those at lower incomes, and an overall increase of 23%. Studies show that the total may amount to $1.8 trillion, and is expected to increase to $2.5 trillion by the summer.1
What’s the bottom line here? Wealthier Americans already tend to put away cash, and it’s not unusual for that to increase during difficult times (the same thing happened in 2009, leading into the so-called “Great Recession”). The problem is that money sitting on the sidelines isn’t moving through the economy. This has many potential results for the American economy, including diminishing growth and further economic inequality.
In a country where Americans are getting stimulus checks and extended unemployment benefits, the message between the lines seems to be “please spend money.” While it’s a perfectly normal instinct to sock away extra money when you have it, there are cumulative effects for the economy if not enough money gets invested.
You may be ready to have a conversation about what to do with the money you’ve put away. Needless to say, If you would like to talk to a financial advisor, feel free to give me a call.
If you ever have any questions about your investments or retirement plans, please feel free to give me a call at 801-545-0696.
Regards,
Mark Lund
Stonecreek Wealth Advisors, Inc.
11650 S. State Street, Suite 360
Draper, UT 84020
Citations
Axios.com, March 15, 2021
This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. All economic and performance data is historical and not indicative of future results. Market indices discussed are unmanaged. Investors cannot invest in unmanaged indices. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This material was prepared by MarketingLibrary, Inc., for Mark Lund, Mark is known as a Wealth Advisor, The 401k Advisor, Investor Coach, Financial Advisor, Financial Planner, Investment Advisor and author of The Effective Investor. Mark offers investment advisory services through Stonecreek Wealth Advisors, Inc. a fiduciary, independent, fee-only, Registered Investment Advisor firm providing investment and retirement planning for individuals and 401k consulting for small businesses. Mark’s newsletter is called The Fiduciary Report. Cities served in Utah are: Salt Lake County, Utah County, Park City, Salt Lake City, Murray, West Jordan, Sandy, Draper, South Jordan, Provo, Orem, Lehi, Highland, Alpine, American Fork.
