In a previous article, we discussed Bankrate.com’s study on how more consumers are cutting back on their spending. BlackEnterprise.com took a moment to sit down with the financial education website’s chief financial analyst, Greg McBride, CFA for more insight. Here’s what he had to say.
BlackEnterprise.com: Why do consumers feel a need to cut back all of a sudden?
Greg McBride: Sustainable growth in household income is the missing ingredient from this economic recovery and the leading culprit for why consumers are holding back on monthly spending.
BlackEnterprise.com: Generally, do you think consumers are still worried about the economy?
McBride: Worries about the economy have dissipated somewhat over the past year while consumers’ desire to forego additional spending in order to save more has increased. Declining gasoline prices are a welcome relief to households still burdened by tight budgets. But the relief is modest, amounting to less than $20 per month for the typical driver.
For more on this topic, see the article Consumers Cut Back on Spending.