Chart of the Week: How Is The Middle Class Spending Their Money Compared To Six Years Ago?
Wall Street Journal analysis of middle class income and spending show how the Great Recession has changed buying patterns. What are the takeaways?
- Income has been flat from 2007-2013 at about $49,000 per household while inflation has grown over 12% which means families are losing ground.
- Consumers spending more on necessities, less on wants: Home internet, cell phones and health insurance saw largest increases while residential phone, household textiles and women’s apparel saw largest decreases.
- From the article: ““Part of the story is that your income growth is slowing,” said Steven Fazzari, an economist and chairman of the sociology department at Washington University in St. Louis. “They’re spending more on necessities, cutting back on other types.”
- For those categories that showed largest increases, have students brainstorm on how they might be able to control costs. For example, with their cell phone data plans they could review their activity to be sure that they aren’t using less data then they are paying for.
About the Author
Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.