Hey, Big Spenders!

Last year, average Americans not only spent everything that they earned, but dipped into savings or borrowed money to pay for their purchases — at a negative 1.0%, the savings rate for 2006 was the lowest it has been since 1933, in the depths of the Great Depression, according to a newCommerce Department report. Back then, of course, unemployment was sky-high, with one-in-four workers unable to find a job. In 2006, in contrast, the unemployment rate averaged a modest 4.6%. Still, according to a recent Pew Research Center survey, more than three-quarters (77%) of all Americans describe themselves as the kind of person who “always looks for ways to save money.” This paradox is not as stark as it may seem, for nearly two-thirds (63%) of Americans also acknowledge they don’t save enough, and more than a third say that they often (11%) or sometimes (25%) spend more than they can afford. Asked what they splurge on, people most frequently cite food and restaurant dining, followed by entertainment and recreation, then shopping and personal items.Read More