While millions of people were stuck at home during the lockdown times, by and large, financial experts agree they weren’t spending. Without the ability to blow money to have a good time, millions of Americans stowed away a tidy nest egg next to their cache of spare toilet paper.
But no more, The Washington Post reports: enter YOLO spending.
Spending money on international travel and live entertainment like concerts spiked 30% last year, the paper reports. And there’s no end in sight, according to brand-new data from the Bureau of Economic Analysis: Consumers spent $145.5 billion more in February than they did in January
Disposable personal income jumped to $50.3 billion, and we’re disposing of it, evidently: Analysts say personal spending dropped in February to 3.6 percent from 4.1 percent the month before.
“When you live through a crisis, it gets ingrained in your brain,” University of California at Berkeley Professor of Behavioral Finance Ulrike Malmendier tells the Post. “The adverse effects of covid weren’t necessarily financial; people got jobs quickly and the government stepped in with support. Instead, it’s about all of the things we were starved for: human interaction, socializing, travel. People are spending money on the things they missed most.”
Carolyn McClanahan, a financial adviser in Jacksonville, Florida, agrees, telling the paper her clients are now budgeting more for fun in addition to their golden years: “People already had this attitude that you only live once — and that’s been put on steroids,” she said. “Covid was a big wake-up call that life is precious, so you’ve got to enjoy it now.”