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WHY AMERICANS ARE GOING BROKE:
This article starts by saying that despite rising interest rates, high inflation, and shrinking savings, consumer spending has not slowed down – instead, it’s skyrocketed higher. Americans spent 5.8% more in August than a year earlier, airline revenue boomed, and the experience-economy was better than ever, with sites like Ticketmaster selling 18% more than they did in 2022.
https://www.wsj.com/economy/consumers/americans-are-still-spending-like-theres-no-tomorrow-6a1d307
As they say: “A tough housing market has more consumers writing off something they’d historically save for, while the pandemic showed the instability of any long-term plans related to health, work or day-to-day life. So, they are spending on once-in-a-lifetime experiences because they worry they may not be able to do them later.”
This is also compounded by 5 main reasons:
1. A Robust Job Market.
By all measures, the jobs market has almost completely returned to pre-pandemic levels, with businesses less desperate to fill a large number of open positions as a result of worker shortages.
2. American’s Are Playing With “House Money.”
It’s reported that “Americans collectively pocketed about $280 billion from tapping the equity in their homes and saved about $120 billion from refinancings,” allowing them to spend a lot more money than they would, otherwise.
3. Excess Savings
This refers to all the “extra money” that Americans were able to accumulate from staying home, not spending money, receiving stimulus checks, collecting unemployment, and otherwise seeing a surplus being deposited into their bank account.
4. The “Buy Now” Approach
For the majority of products, prices have risen each and every year since 2020. This has caused people to take the approach that – it’s better to buy today before prices have a chance to go higher – so, they’re spending upfront in an effort to save.
5. New Outlook On Life
For a lot of people, the shut down forced them to view their life and mortality in a different way; it made them appreciate what they were previously missing out on, or just how quickly situations can change, so they’re deciding to live it up today, while they still can.
THE BEST WAYS TO SAVE:
“The Dave Ramsey Zero Budget Method”
With THIS strategy, the goal is that – in the very beginning – your monthly income and monthly expenses should equal absolutely $0, so that way – every single dollar is accounted for and gets allocated for a specific purpose.
The 50/30/20 Rule: 50% Needs, 30% Wants, 20% Savings
Half of your overall budget should go to the absolute necessities that you can’t possibly live without. From there, 30% is allocated towards “wants” – which, is another word for optional, discretionary spending. And finally, 20% gets allocated for savings and investments.
HOW TO START:
1. START IMMEDIATELY
You have the most momentum when you’re initially excited about the idea of trying something new and ONCE you start, you’ll be much more likely to keep it going.
2. ITEMIZE YOUR EXPENSES
All you need to do is make a free account with any money-tracking platform – and from there, you can see exactly how much money is going into and OUT OF your accounts every single day.
3. SCALE BACK SPENDING
Here are the top 10 categories that are easiest to cut back:
https://www.hloom.com/blog/special-reports/the-united-states-of-financial-waste
4. PAY YOURSELF FIRST
I’m running out of space to write more in the description, so watch the video all the way through – enjoy!
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Do you believe in “late stage capitalism”? Is this what’s happening?
Could you make a video about target date ETFs like AOR and AOK?
I mean I rather own nothing and be happy than own everything and be unhappy. Plus they are just making life easy from themselves and taking from us so they are probably gonna be weak and we are are prob gonna be stronger doing with nothing. I mean I rather learn how to be strong under pressure so to them they are ruling and making me weak but to me I use them to gain strength get stronger by going through the adversity and learn extreme self control I mean I rather be the jack of all trades able to do with or without.
Sorry @GrahamStephan but Im not sure what extra savings from the pandemic you believe people still have, but that savings was already used up by the following year of 2020/21 when those corps were continuing to see record profits during the pandemic and recovery of the pandemic. Things were getting back to normal and price gouging was the now the norm.
Great idea
If someone could explain how to live the 50/30/20 as an independent contractor that would be helpful.
I can speak for the article
I too am very broke and have just been hitting the credit card because I just wanna be able to eat a nice dinner instead of soup one day this week
Really tried to like your channel Graham but the quality of the vids just aren’t there for me. Just seems like a lot of content aggregation with really generic cookie cutter advice as filler – like vids just for the sake of following a schedule. It really does feel like you’re a little out of touch to be giving financial advice to working class people.
$10,000 on a trip to Maui? Wow, they didn’t even leave the United States. I’m single not a couple but I could travel the world (multiple continents) for several months and I still wouldn’t spend $10,000. They cheated themselves with that one. Could have went to multiple places that are way better for that price.
Taxation is theft the gov uses Your money to enslave YOU
His excessive hand gestures look and feel unnatural
I’m definitely spending on travel, but I travel extremely cheaply. Travel is the primary thing that gives me joy in life, and it gives me motivation to earn more.
Asteroid going to take us out April 13, 2026 and if it doesn’t then it will happen six years later for sure.
Better to travel and be able to jump into the water @ 20-30 than to sit at the beach and drink cocktails at 70… no wonder we spend too much
i just saw a stupid instagram reel that said now is the time to buy a house because your equity is going to jump in the next 3-5 months. The amount of shitty advice from get rich quick “investors” is astounding.
People are not spending like crazy everything has gone through the roof in prices
This guy is just alittle to woke for me.
thank Biden and all progressive DEMS.
Gotta have the handbag! So important!
lol – this dude is so out of touch. Used to like his vids – now they’re so unrelatable to the avg person.
where
is
the
coffee
Because money doesnt exist. Its imaginary.
The median individual income hasn’t doubled in 25 years but housing costs have nearly 5x. The working class has been destroyed financially and it boils down to corporate and investor greed.
bro put $50 on onlyfans and thought no one would notice
$50 on OF 😂
you won the brain chemistry lottery
To be fair they look at how the government spends and realized that our money has no value now
Anyone else in the “wish I had money to spend like this” club? 🖐️
That’s the point though. They *don’t* have that kind of money. They’re taking on massive credit card debt and leveraging themselves into bankruptcy to take these lavish vacations and buy these things they don’t need
Hi Graham. You seem sad in your podcast. Hope you are okay.
I think people have just grown tired of watching the upper class flourish while living a bare-bones existence.
We could save money, but what’s the point. It just becomes more and more worthless everyday. Might as well spend it while we can. Rome is burning.
I wonder what Caleb Hammer has to say about all this
hey graham i want your reaction on a fortnite streamer “clix” flexing his checking account with 14mil in it. made me laugh about how he is missing out on so much more money by letting it sit in a checking account as well as most likely not being aware of FDIC insurance limit or maybe he doesn’t care🤣 anyway, love your content!
Own software. Only asset with no property taxes and you can write off building it.
Could that mean all of us will be the owners of our Trusts?
You talk with you hands a lot
We all know the world is about to end lol
The only issue with that Dave Ramsey method is with prices, mortgages, interest rates, etc. going up all the time. Everytime you plan a budget you just end up spending more and more and more out of your control. For example gas, groceries, and housing (even fixed mortgages). Rising year over year or even month over month. This is so hard to accomplish.
My wife and I put big increases in the grocery, gas, and rent lines every year to try and account for inflation
Yep, I believe you. Stress and depression make people act stupid. Really stupid. I’ve seen this in people I know.
Americans can spend on toys, clothes, vacations, dining, etc. but can’t pay back student loans?
LMFAO!!!
Typo at 4:24 🫶🏻
COFFEZILLA EXPOSED YOU GRAHAM 😮
Hey graham I just moved to Santa Monica and have always followed your videos and advice and ended up selling two house in Florida and am now getting licensed in California
If there’s any way I can help you or take some workload off your back or help you in order to be mentored in the SoCal real estate market I would greatly appreciate the opportunity and make it well worth your time and attention.
Bumping up this comment so hopefully it gets seen
Man, lets be honest here. I have no intention of saving cash in a bank saving account. Not because i’m too much of a consumer or because I have bad spending habits. It’s because Banks are failing like crazy and more and more it’s looking like the US dollar is being intentionally forced into collapse because the Feds want a radical alteration in traceable currency. Id rather put that cash into things that can better help me survive the long term downturn in economic mobility than put that cash in a bank that might well collapse before I have a chance to pull that savings out or, wake up to find that cash being worthless because the Fed decided that anyone with less than 50 million in assets should just live on the streets because wealthy people need more wealth and they own all the possible candidates for every political position with real influence.
You look like a younger version of Shmee150
Blaming Chinese for all US problems. Problem unsolved
People have gotten used to a certain type of lifestyle, and rather than adjust to make ends meet, they are choosing to get more and more into debt to maintain the illusion of that particular lifestyle.
It’s not GODS Monetary system, It’s Lucifers! That’s why Lucifers Coins are Easy come, Easy GO! Maybe that’s why you can’t take it with you..GOD knows you will have NO use for it!!😮😮😮
Don’t worry little guy I’m spending my money you saved and what? You be taking there’s ⚰️
Best way to spend less on expenses is vote Trump in 2024.
This is the poor people mentality that will cause them to stay poor snd then turnn around and want to blame everything else for their money problems/issues.
Take a breathe man it’s not that serious .
I’m so confused who the hell is doing all this spending. At this point do what makes you happy.
2:10-🤦♂️
Omg,this is so dumb.
I don’t believe in that own nothing and be happy.
Jesus loves you, believe in him as your savior!!!
I’m not spending, I’m saving and the interest has been hundreds of dollars in just a few months.😮
resignation and despair inevitably follows after years of dysfunction. Its an illusion that leads to delusion…..
I payed myself first, best advice I ever got.
Yes so therefore the stock market should crash
Americans are spending 80 percent of their income on needs
People are acting super irrational, but will play the victim and want the government to bail them out (aka other taxpayers). Can’t wait it’s our turn to reap the rewards for working hard, not slurging, saving money and investing.
Graham making bank on these videos like there’s no tomorrow.
It’s bad because there’s people that watches closely how Americans do what Americans can do freely. I’m not sure why all this information is being tracked? Are humans being observed illegally? Does all systems require analysis to spend? Government and elitists are always watching like rats
Video title is hilarious.
Onlyfans lmfao
7:59 Come on, no one else found the $50 expense funny?
Finally graham is talking about the yield curve (and acknowledge that bond market trying to tell us something). for that i give a like to your video.
Those jobs numbers have been fudged and we all know it. If the market really was that good, why haven’t we reached the number of people employed as there were before covid.. ..They’re lying to create an illusion of a “good market”.
From the perspective of investing in American stocks, it is always good to see Americans overspending. 🙂 keep going lol
Keep’em broke
🎩🥃
“Freedom’s just another word for nothing left to lose.”
Own nothing be happy 😂
4:55 I disagree that it’s yolo mentality. People just want to be happy, have a passion, and not be overworked
gym membership is not a want, it should be a need. your health (and mental health) is not at the same tier as a netflix subscription
renting and living in a garage crazy ngl
Hands Stephan! His hands are the star of every video.
The whole country lives in debt, and no one is going to pay it back. Instead, why wouldn’t the US start a new war somewhere?
NO!! A dozen eggs has trippled in price so it looks like people have more to spend, however they simply are trying to deal with the VERY high cost of foods/life so it looks like they have more to spend but they do not. Many can not afford to pay rent after they but food. Car insurance has gone up 30% my agent tells me. Discretionary money no longer exsist for people. Has any one noticed how thge homeless population has sky rocketed??? People have been brought to their knees finically.
Bidenomics
Cause there IS no tomorrow
It’s only a problem for the banks that lent out the $.
YOLO
This is good advice, but what about those who makes minimum wage jobs or is in a low paying job after finishing college? It’s hard to save up in the beginning when all the money earned from the job just goes straight to bills and basic necessities. I’m lucky I live with my family so I can save up, but I’m already considering looking for a side hustle to see if I can add more into savings. Trying to save up in case of emergencies.
Oh dear lord… I hope this is just him trying to hype us up bc how incredibly sad.. Not good news on Christmas especially 😔 my heart breaks for us.
Ey man, whats wrong with rice and beans? 👀
Illegitimate pleasures always leads to disaster.
TBF, we are just spending exactly like our government 🙂
This is a direct result of student loan forgiveness action from Biden, basically people do not feel responsible for their acts as they know that government will always have their back or they can declare personal bankrupcy
America’s cashing in, people don’t feel like there’s anything left to save for.
How can i block this guy from always popping up?
Worst thing is those who complain about the economy are the ones who are spending the most.
They will never blame themselves for not having money. There is always someone else to blame.
Working 20 years toward a job where I could afford a house now guess what… Insane housing cost taking half my income with no down payment savings possible after student loans. FML
Enjoy life while your young. I am not gonna kill myself working to save for retirement. I don’t wanna enjoy the money when my body is breaking down with arthritis, go out there and see the world. We all fucking die one day and we won’t stay young FOREVER!
You couldn’t expose your Rolex or Zenith more. 🤣
$50 on OnlyFans 😂
Hehe, wait until the bad happens
Must be nice to have stimulus
Hmm, here it seems like people are pulling back. Costco hasn’t been nearly as busy or carts nearly as full.
Stop blaming Americans.
The problem is a debased currency. No matter how irresponsible Americans are with money, the American government is far far worse.
You only live once but be responsible
My wife has private practice and patients complain about expensive thing a lot. One of them asked her to rice price because everything goes up, she said that she would not. I spent half of my life in communism and they practiced the same philosophy as you. But it lasted very short, everything collapsed. Job market means a little in these case, because having job does not mean that you have money enough.
So, we do not watch news 25 years, there is no better news than from patients in our office. They say very short very important things, because they do not earn money telling us anything. 😉 They have to say short and the most important. 🙂
Spend like there’s no tomorrow, and you won’t have a tomorrow.