The Daily BS • Bo Snerdley Cuts Through It!
The Daily BS • Bo Snerdley Cuts Through It!

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Americans say they’re broke — but the shopping cart keeps filing up

by

THE DAILY BS: HOW MUCH CAN YOU HANDLE?

SPARE ME THE BS (I’ve got things to do).

  • The Conference Board’s Consumer Confidence Index fell to 81.9 in September, while a reported measure of card spending rose 6.2% year over year.
  • Financial adviser Ted Jenkin argues that social-media comparisons, installment plans and emotional spending contribute to the disconnect.
  • Higher spending does not necessarily mean everyone is buying more; rising prices and differences between households matter.

LAY IT ON ME (I’ve got time).

Americans are worried about their finances. Groceries are expensive, housing costs are painful, and everybody seems to have an opinion about the economy.

Meanwhile, the shopping carts are still rolling.

Financial adviser Ted Jenkin points to an intriguing contrast in a Fox News opinion column: The Conference Board’s Consumer Confidence Index dropped to 81.9 in September, while a reported measure of credit and debit card spending per household increased 6.2% from a year earlier.

Apparently, consumer confidence went downstairs, and consumer spending missed the elevator. Jenkin argues that the explanation isn’t just economic. It’s psychological.

Social media encourages people to compare their ordinary lives with everybody else’s vacation photographs. Installment plans make large purchases look smaller. And buying something nice can feel a lot better than worrying about next month’s bills.

But Jenkin makes another distinction worth remembering: Not every American is having the same financial experience.

Some households have the income and assets to spend comfortably. Others are paying more simply because necessities cost more. And spending more dollars doesn’t necessarily mean bringing home more stuff.

Jenkin’s most memorable observation concerns the difference between appearing wealthy and actually having money.

“Net worth doesn’t have an Instagram account.”

That’s a useful reminder in an era when a fancy car tells you nothing about the size of the payment attached to it.

Jenkin recommends waiting before major impulse purchases, taking a break from buy-now-pay-later arrangements, and putting aside part of each paycheck where possible.

None of that will make groceries cheaper. And plenty of families have no room for discretionary spending in the first place.

But for those who do, the question is simple: Are you buying something you can afford, or buying another monthly obligation?

DBS WIRE SOURCES (I’ve got all day).

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