Blowing cash appears to be the new American pastime. Between 2010 and 2020, global spending will increase 43 percent from $28 trillion to $40 trillion, according to a report from consulting firm A.T. Kearney. And the U.S. will account for an entire quarter of the growth pie.
While the Great Recession continues to permeate the air in parts of the U.S., the rest of the country is sweeping away the remaining economic cobwebs from the crisis. This past October, the Federal Reserve’s “Beige Book” reported all manner of improvements: jobs expanding, industries growing, consumer spending on the rise.
All this good news supports the “wealth effect,” a fancy term that describes consumers’ tendency to spend more as they earn more. But it was precisely this “perceived wealth” that enabled Americans to bite off more than they could chew, leading the country on a path to the most destructive economic catastrophe in recent history. As of June 30 this year, total consumer debt stood at $11.63 trillion, higher than it was at the same time in the previous three years, according to the Federal Reserve Bank of New York. Are Americans at risk of becoming financially overextended again?
On the heels of WalletHub’s money-saving report on retailers offering the best deals for Black Friday — the biggest shopping event of the year — we are raising awareness of America’s growing addiction to debt. To find where America’s biggest spenders live, we analyzed the 50 states and the District of Columbia based on 10 key metrics. Our data set ranges from personal spending on various categories to the number of cars per household. The results, as well as expert commentary and a detailed methodology, can be found below.
Biggest Spenders (Adjusted by Income & Cost of Living)
|25||North Dakota||51||District of Columbia|
Biggest Spenders (Not Adjusted by Income & Cost of Living)
|3||New Hampshire||T-28||Rhode Island|
|8||District of Columbia||34||Florida|
Although increased national spending signals a prospering economy, the implications of heightened personal spending can be more damaging. To expand the discussion, we asked a panel of experts to share their advice and insight regarding consumers’ spending habits and how to keep them in control. Click on the experts’ profiles to read their bios and responses to the following key questions:
- What tips do you have to help people avoid overspending?
- How do you think the current social and economic environment is influencing household spending decisions?
- What tips do you have for how people should allocate their disposable income?
- Nearly 1 in 15 adults are shopaholics. How can someone tell if he or she is a shopaholic?
- What can family members do to help someone with a shopping addiction?
Ask the Experts
In order to find the biggest spenders in the U.S., WalletHub analyzed the 50 states and the District of Columbia across 10 key metrics, which are listed below with their corresponding weights. The metrics marked with an asterisk (*) were divided by the most recently available income and cost of living data for the adjusted rankings of this report.
- Per Capita Personal Consumption Expenditures for:
Food & Beverage (Non-Restaurant and Non-Bar Consumption)*: 1
Gasoline & Other Energy Goods*: 1
Housing & Utilities*: 1
Health Care*: 0.5
All Others*: 1
Auto & Credit Card Debt per Capita*: 1
Annual Consumer Savings Account Averages*: 0.5
Number of Cars per Household: 1
Average Home Square Footage: 0.5
Percentage of the Population Spending More than They Make: 1
Data used to create these rankings was collected from the U.S. Census Bureau, the U.S. Bureau of Economic Analysis, the Missouri Economic Research and Information Center, the Federal Reserve Bank of New York, Zillow.com, FINRA Investor Education Foundation and Pitney Bowes Inc.