American shoppers spend on instant gratification
The holiday shopping season is in full swing but taking a closer look at what Americans are buying reveals an interesting shift in the mix. According to the U.S. Commerce Department, where our money goes is fundamentally changing.
So what are we buying now?
Personal finance expert and CBS News contributor Regina Lewis said Americans may be living on a shoestring, but one thing's for sure -- spending is the American way.
Our spending has accelerated -- we're now spending the same share of our income -- 93 percent -- as we did in the early 2000's -- pre-recession -- and more than we did in the '60s, '70s, '80s or '90s, Lewis said. Our love of spending prevails, she said because the shift in spending reflects a newfound tendency to live in the moment and gravitate toward things that entertain us, save us time or make us look and feel better now versus later. Lewis said people are living month-to-month and are spending minute-to-minute on smaller-ticket items that yield instant gratification.
Lewis shared what's in:
Spending on wine is up 14 percent -- and it only fell two percent during the recession. It's considered an affordable luxury. As for the glasses, that's a longer-term investment in home goods -- we're less likely to go there.
PETS AND VETS:
Americans love their animals. They love us back. Lewis calls it "affordable, unconditional love."
HEALTH AND BEAUTY:
We might not be able to get a new wardrobe this season, but there's apparently nothing like some highlights and a manicure to give a lift. Cosmetics purchases are also up -- even when you look at a category like shampoo. There's a shift now toward buying it in salons. Maybe not the most high-end brand they carry, but the next one down. One beauty products wholesaler deemed it "masstige" -- the notion of selling affordable, prestigious products to the masses. Home health care is up and soon, following this same trend line, Lewis says home delivery diet companies will do well when New Year's resolutions kick in.
Buying a new boat or joining a country club may not be in the cards, but we can catch a quick game and make it a memorable day or night. It's a pleasurable, quality of life purchase that doesn't have to break the bank.
Psychological counseling is attracting the highest share of income on record. We'll pay to feel better, even if requires as specialist and a prescription.
We are shifting away from bigger ticket items that we perceive as longer-term investments.
Spending on furniture and even carpets is down. Not only that, we won't even repair furniture anymore. If the leg on the couch is busted, we prop it up with a book.
Leasing cars and trucks is down and Americans are now spending more money on gas than the car itself, dedicating $3.51 of every $100 in take-home pay to gas. For most of the past 50 years, that ratio was reversed -- we spent twice as much on the car as we did on gas.
Retailers can offer all the rebates and incentives in the world, but when it comes to investing in big ticket items for our homes -- which we no longer view as appreciating assets -- we'll live without an ice maker, let the washing make weird noises -- anything to not have to fork over money on something that doesn't give us instant pleasure, but reminds us that owning a home can mean unforeseen and unwelcome expenses.
We have a pretty good track record of spending what we have, Lewis said. So, a significant economic change in the job market -- more hiring, bigger bonuses -- and in the stock market in terms of its affect on retirement accounts -- could help.
The biggest variable, Lewis said, is housing. She said so much spending revolves around housing starts and investing in your home -- everything from ordering window treatments to replacing an aging oven. And, Lewis added, the most fascinating part of all to keep an eye on is the longer we live with affordable luxuries maybe -- just maybe -- we'll realize they're enough.
- How to stop junk mail - forever
- Dad Punishes Daughter with Free Babysitter Ad Play Video
- Best Low-Tech Cell Phones Suitable for Seniors
- Sara Moulton's Easy Dinner for Four, on a Budget
- Legit Work-from-Home Websites - and the Scams
- Five-Year-Old Arrested Play Video
- PickleBall Play Video
- Best Wheeled-Luggage for Your Budget