Experts predict we will enter into a recession next. As this narrative continues to pop up across media headlines, Americans seem not to care.
The Bureau of Economic Analysis reports the personal savings rate fell to 2.3% in October. That is the lowest level since 2005. Why aren’t people saving? Are we in denial that a recession is coming? Did we not have any money to save? The truth is the opportunity to save is there, but many would rather spend it all.
According to Insider, households brought in nearly $2.5 trillion in excess savings during the pandemic. Spending rose 0.5% in October, the largest since January, but inflation is not solely to blame.
There is no guarantee of knowing if a recession is coming next year. You can control how much you’re spending and what you’re buying. A recent survey shows Americans increased impulse spending by 14% in 2022. That number is alarming with a looming recession at bay.
Living like the rich and famous only makes sense if you are rich and famous. Even the rich and famous never stop saving money. Warren Buffet lives a modest lifestyle. Buffet still drives a 2014 Cadillac XTS. The billionaire investor also steers clear of expensive parties and trips. Meta CEO Mark Zuckerburg chooses to wear jeans, t-shirts, and sneakers over tailored suits and expensive shoes.
The bottom line is that not saving leaves you vulnerable to a recession and unexpected life events or tragedies.
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