Let’s face it, times are tough. Financially, Americans are facing significant inflation costs, causing some to rethink just how much they want to buy those extra groceries or if that trip they’d planned is still worth taking. A recent Wells Fargo Money Study, released in late February, found that two-thirds of Americans have decreased spending due to the economy.
2024 Wells Fargo Money Study results
The survey, conducted in collaboration with Versta Research, asked 3,403 American adults and more than 200 teens ages 14 to 17 to share more about their attitudes toward money. Sixty-seven percent of those surveyed said they’re cutting spending, half have put life plans on hold and 35% have had to dip into savings or investments. Two-thirds have reported that they are able to get by, but they don’t have much for extra expenditures.
We are done being judged for financial concerns
Michael Liersch, head of advice and planning for Wells Fargo in New York City, says, “It’s also striking that more than half of Americans—57%—admit needing a mental reset when it comes to their money, with many feeling embarrassed, judged and overly focused on money.”
Yet, it’s not really something to be ashamed of; it’s a battle Americans are almost universally fighting right now. Inflation rates rose from December to January in the categories of shelter, food, electricity and airline fares, according to the U.S. Bureau of Labor Statistics and CNBC.
“Across the board, we are seeing that Americans are seeking a financial reset, and they want to feel less judged as it relates to their financial decisions,” Liersch says. Trends like “loud budgeting” on TikTok show that younger generations are pushing for more transparency on the struggles of personal finances, a topic that used to be taboo. Loud budgeting involves proudly declaring that you don’t want to spend a certain amount, exerting your financial boundaries more publicly than before.
Teens are stressing, too
Speaking of those younger generations, half of the teens surveyed admitted they had lied about spending.
“Today’s teenagers look more like today’s adults when it comes to thinking and worrying about money, with more than one in three saying they think about money a lot. In fact, 73% of teens say they sometimes over-focus on how much money they have or don’t have, and nearly all of teens (91%) want to learn new ways of thinking about and dealing with their money,” Liersch says. “They’re telling us that they are more worried and having to make some tough choices—and what’s more, teens are more concerned about money than today’s adults were when they were teens.”
What families can do in uncertain financial times
Jen Reid is a financial planner and founder of Base Financial Planning, and she works with teens and families in private coaching sessions. She remembers her own personal experience with lying about spending as a teen as well, saying she used to spend $300 to $400 on shoes and clothes at TJX department stores, then would hide tags or rip them off so her mom didn’t see.
“When she asked how much I spent on it, I would always say under what I spent. From there I would gauge her reaction, and I never told her the total amount that I spent on everything,” she says. This level of secrecy and shame around spending might start early for some, even starting as young as 7 or 8 years old—the age Reid says our money beliefs have already been established.
“Most families are not talking about money or not creating a safe space around money and finances. When talking about finances or money as adults, we forget that kids are hearing everything and soaking it all in,” Reid says. “Because of these ways of dealing with money, we are either creating an anxious, unsecure, unaware or secure environment for children to learn from and create their own feelings around money.”
She hopes parents create an open and calm space to talk about money and don’t shame kids for what they want to buy or how they spend their money.
We are ready to align our money and values better
The Wells Fargo study also shows that Americans are ready to get their spending in line with what they really care about.
“Given that a large majority (84%) want to be more intentional and thoughtful about their spending than they are right now, we can see that they are beginning to lean into the idea of aligning their money with their values,” Liersch says. “The data also indicates that people want to be more intentional about money, with two-thirds (68%) agreeing that their money story is more about who they are and less about their money.”
He adds that even if you didn’t get adequate financial literacy training in school, it’s never too late to start learning about it, whether it’s distinguishing wants from needs or instituting family money discussions. And these money talks don’t have to be all work and no play.
“One idea to encourage a family money talk that I share with clients is to arrange an interview and allow kids to ask their family questions about money. How much does a house cost? How much does a car cost? What’s the most outrageous gift you can think of? And conversely, parents can ask their children questions,” Liersch suggests.
Preparing the next generation for financial transparency just might change the stats of this survey and our attitudes about finances decades from now.
Things might be tight now, but the future looks bright
Liersch says the reports show the future still looks bright.
“Americans are still optimistic about their futures. Despite concerns when managing spending, across all those surveyed, one-third (37%) say they have been putting more into savings and investments while a full 69% of young affluent Americans report doing so,” he says. “Similarly, three out of five (62%) feel that now is a good time to take advantage of new financial opportunities. And nine out of 10 (91%) feel it is a good time to be saving, though just one in seven (14%) feel it is a good time to borrow.”
So before you decide that $10 bananas mean the world is imploding, consider your own deep-seated perspectives on money and what you can control now. The next generations are watching intently.
Photo by fizkes/Shutterstock.com
