If you want to know how people feel about their economy, you look at their pocketbooks. Are they fatter or have they gone on a diet?
Family finances are multifaceted. Some of the more important aspects include…
1 – US Incomes rose 4% after adjustments for inflation last year. This was the first time that incomes have risen since the beginning of the pandemic. Prior to this, inflation had nullified all wage increases.
2 – 401(k) Balances have risen to an average of $127K in the second quarter of this year. This is up from $107K two years before.
3 – American households are now saving an average of 2.9% of their income. This is about half of what the rate was before the pandemic.
4 – Credit Card Debt for those who carry balances, has risen to an average of $6,219. This number was only $5,834 before Covid.
5 – Inflation has increased 21.6% in the past four years. In the four years prior to this from 2015 to 2019, prices only inflated 7.9%.
In a recent study, Americans are feeling less confident about the economy and their financial prospects, than they did before the pandemic. Why? The numbers speak for themselves, but there are other aspects to consider.
In the period from 2020 – 2024, the average cost of groceries increased 23.02%. That number was only 4.48% in the period from 2015 to 2019.
The costs of operating a car have skyrocketed. Interest rates on car loans went from 5.4% back in 2019 to 7.1% last August.
The cost of repairing a car and the insurance expenses that result have gone through the roof. While gas prices have recently decreased, they’re still 20% higher than they were before the pandemic.
As a result, Americans are now keeping their cars longer. Back in 2019, cars were kept an average of 11.8 years. That number is now 12.6 years.
The costs of purchasing a home have almost doubled inside that period. The median price of a mortgage in July of this year was $3,010. Back in December of 2019, it was only $1,566.
Let me leave you with this…
It really is much more difficult now, than it was just four short years ago, to live the American Dream.
The Inflation numbers came in this morning and they were decent. Prices increased 2.5% in August as compared to the year earlier period. This was down from 2.9% in July.
And what happened as a result? The stock market dropped a full point and a half in morning trading.
Everyone is simply on edge. Any news, whether good or bad, is now being interpreted as gloomy, pessimistic, and unfavorable.
This reminds me of the period in the middle of the pandemic. After we’d been through the worst of it and things were getting better, everyone still found a reason to be negative.
Please realize that these sorts of things have a way of feeding on themselves. If you come up with a reason for things to become bad, sooner or later they will.
So, I’ll simply ask all of you to be positive.
As Entrepreneurs, we are the leaders of our communities. If we spew negativity, those around us will do what they do best. They will follow.
But if we look for the good in things, see that our cups are actually half full, and dare I ask.. smile from time to time, what will those around us do? They’ll do what they do best.
They will follow.
I know what I’m asking isn’t easy. These are difficult times. I don’t even want to think about my grocery bill, insurance costs, or property taxes. When you factor in the various wars around the globe, our upcoming elections, or what is probably going to happen to our income tax bills in the next few years, it’s enough to make a Billy Goat puke.
What I’m asking isn’t easy. Leadership seldom is, but that’s what you signed on for. Remember…
Entrepreneuring isn’t just a job. It’s an adventure.
America will get through this. In my short lifetime I’ve met the Four Horsemen of The Apocalypse. Bad economies, horrible markets, lousy leadership, and anything else you can possibly imagine has made all of our lives more difficult.
But this is still the greatest nation on the face of God’s green earth.
So stand tall, stick out your chest, and realize that as bad as we may have it, others have it much worse.
What makes Americans different from the rest of the world is our resiliency. When we see problems, we create opportunities. While others fail, we improvise, overcome, and adapt.
For we are the very beating heart and loving soul of this great nation. Without us, what would America be other than unemployed?
So be positive, smile, and think of the many great things that make up your life. Be the American Entrepreneur you were born to be.
And while you’re at it, let’s stand together, as one. For divided, we will certainly fail.
We’re all going to get through this. Let’s get through it together.
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Sincerely yours,
Chris Amundson
President
Accounting Solutions Ltd.
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