Do you know where you are spending your money? The habits of America in 2023.Apr 15, 2023
It’s 2023, do you know where your money went?
It’s become very easy to spend money and not even realize it. Gone are the days when everyone paid with cash and the empty wallet clued you in to how much you spent. With the technology at our fingertips, it's easier than ever to make purchases and spend money without even realizing it. However, if you want to have a financially secure future, it's important to know where your money is going.
So where are Americans in 2023 spending their money?
It’s is pretty easy to see the obvious areas we spend money. The big ones are typically housing, transportation and, for some of us, education or healthcare.
Let’s talk about the not so obvious ways we spend our money.
Does anyone use Amazon? It’s a silly question I know. Online purchases skyrocketed with the pandemic and now Americans habitually use online shopping. Americans have been purchasing groceries, clothes, electronics and almost anything we could think of on line. We can just think of something, order it and it arrives on our doorstep!
How about cashless transactions? It’s a big trend in America right now and it is growing in popularity. This is an incredibly easy way to make purchases. We can pay with our phones, our watches or our laptops. We just “tap” and pay. The technology is amazing and incredibly convenient.
Do you have any subscriptions? They are everywhere. In 2023, it seems like there's a subscription service for everything, from meal kits, Apps, fitness classes and streaming services. While these services can be convenient, they can also add up quickly. It may be time to check your subscriptions and cancel any you don’t really use.
Now let’s talk about debt. What does this debt actually cost you? This one can seem a bit sneaky. After all, we can make minimum payments on our credit cards bills and that doesn’t seem that bad. Unfortunately, a minimum payment only covers around 2% of the balance and the rest went to pay interest. At that rate, it would take approximately 5 years to pay off a $1,000 credit card balance at the current average interest rate of 20%.
Let’s look at current average debt levels (not including mortgages) in America:
- 18-29-year-olds: $12,871
- 30-39-year-olds: $26,532
- 40-49-year-olds: $27,838
- 70 and older: $9,827
It would take decades to pay off the average debt levels if only minimum payments were being made.
Americans, in 2023, need a good understanding of where they are spending their money. It is easier than ever to spend money without even recognizing it. It's important to keep track of your online purchases and make sure they fit within your budget. Creating a smart budget, paying off debt, and making sure you have a well funded emergency fund will provide a secure financial future.