Understand the Americans’ Relationship with Money

Understand the Americans’ Relationship with Money

The average American typically has a love-hate relationship with money. The basis of this relationship is a set of contradictions as intriguing as they are complex. Read on till the end to understand why.

The Stereotyped Rich

Americans revel in mocking the rich. While a majority of them would like to make more money, they take great pleasure in stereotyping the rich as amoral, corrupt, and greedy.

This bias can be attributed to the widening wealth gap. A 2019 survey reveals that 27% of Americans accept having negative feelings towards the rich. Further, 36% of Americans describe the rich as being self-centered, and the same percentage describe them as greedy.

More than half the Americans surveyed wanted taxes to be raised on the wealthy, and 56.6% of them believed that the rich are favored by the government.

The Great American Contradiction

While 99% of Americans are striving to be among the 1% with wealth, there is evidence of economic stress hounding the majority of Americans. The most common stress faced by the millennial generation is that of student loans. Another 2019 survey reveals that the top financial goal for the next decade for 58% of Americans is to pay back the debt.

And here comes the contradiction. Despite the financial strain and an anxious outlook towards their financial future, almost half of the younger Americans claim that they’ll be retiring as early as the age of 45.

What Is “Spaving”?

A recent survey of 3,000 Americans confirms that 58% of Americans have fallen into the trap of “spaving”, which refers to spending more money in an attempt to maximize savings.

Spaving is one of the biggest financial traps, as it capitalizes on not just convenience but also fear. Frantic buying in fear of shortages leads to unwise financial decisions. 32% of Americans admit to buying greater quantities online to avoid paying for shipping. 15% admitted to buying items simply to apply a coupon. 11% of Americans claimed they buy in bulk only leading to wastage. This is perhaps the most wasteful habit, as food waste is estimated to be 30-40% of the food supply in the U.S.

What Can’t Americans Save?

Almost half of Americans would find it difficult to pay for an emergency expense. The reason is that living within your means and saving almost has a negative connotation to it among Americans. It might even be called a weakness.

In the years following a 1970s recession, the savings rate had significantly gone up in the U.S. In the last few decades, however, easily available credit has brought about a shift wherein the average American now owes more money than he or she has.

Another theory is that the rise of social media has led to noticeably higher consumption. With Instagram and Facebook repeatedly glamorizing consumption, spending habits have been impacted.

The Perils of Financial Strain

Quite expectedly, the financial stress faced by a majority of Americans has a negative impact on their general well-being. A study conducted recently has identified the major ways that this stress is causing damage to the average American.

  • Frequent Bouts of Depression: According to the study, 31% of Americans suffer instances of depression at least once a month due to financial anxiety.
  • Relationship Strain: 21% of surveyed Americans feel that financial strain leads to stressful situations with their spouse or partner. 71% of Americans have admitted to financial infidelity.
  • Reduced Job Performance: Around 19% of Americans admitted to worsened job performance owing to financial anxiety. This could seriously impact their careers, which in turn could lead to further financial stress.

The Elimination of Financial Strain

As is clear from the facts presented here, financial stress can cause significant damage to your life. Fortunately, a few simple tips can be followed to avoid falling into an undesirable trap.

First things first, a budget is essential. It identifies areas of heavy expenditure and allows you to allocate money wisely. The second tip is to save up for an emergency fund. This reduces stress over unexpected expenses. Finally, it pays to set financial goals, such as a retirement plan. These can be built into the budget itself.

Americans can repair their relationship with money by reframing the role and purpose that money plays in their lives. At the same time, consumer spending accounts for 70% of the GDP of the U.S. So, not all the outcomes of American consumption are negative.

How useful was this post?

Click on a star to rate it!

We are sorry that this post was not useful for you!

Let us improve this post!

Tell us how we can improve this post?

RELATED TOPICS

For visitors, travel, student and other international travel medical insurance.

Visit insubuy.com or call +1 (866) INSUBUY or +1 (972) 985-4400