You Only Live Once – How Americans Are Splurging: In this video, we review how U.S. consumers are prioritizing nonessential spending. A basic budget calls for allocating your expenses between the essential ones (rent, bills, groceries, etc.) and non-essential ones, or discretionary, such as dining out, entertainment and shopping.
At the end of the pandemic, spending on essentials in the U.S., including housing, rose by 22% in 2022 compared to 2018. But spending on nonessentials went up 32%, according to a recent study.
This discretionary, YOLO (“You Only Live Once”) spending is increasingly popular among consumers, particularly well-off, younger crowds. Discretionary spending in a population can be an indicator of financial well-being.
Colorado and Utah, along with coastal states like Washington and California, lead the way in discretionary spending, likely due to higher household incomes and robust economic growth, according to the study by StorageCafe, an online platform that provides storage unit listings across the nation.
On the other end, Oklahoma, Arkansas and Mississippi saw the lowest spending on discretionary items, lowest household income and fewest high-income earners, landing at the bottom of the list in terms of financial well-being.
Leisure establishments generated the largest share of nonessential spending, with households spending an average of $3,172 on food services and accommodation in 2022.
Here are the nonessentials with the biggest increases in spending from 2018 to 2022:
- Magazines, newspapers, and stationery + 60%
- Recreational goods and vehicles + 59%
- Recreational items + 55%
- Alcohol for off-premises consumption + 36%
- Other durable goods + 32%
- Food services and accommodations + 27%
- Professional and other services + 23%
- Recreation services + 12%
- Personal care and clothing services + 4%
- Tobacco + 4%
According to research from StorageCafe, an online platform that provides storage unit listings, consumers spent an average of $12,028 on nonessentials in 2022, compared with $9,523 pre-pandemic.
If you found this video interesting, please like, share and subscribe to help increase financial literacy. Find more information about StorageCafe here:
https://www.storagecafe.com/.