Bankruptcy: Incomes stagnate as spending rises

On Behalf of | Sep 11, 2019 | Bankruptcy

The last few months of the year are filled with celebrations and holidays, many of which seem to fall one right after the other. From purchasing new home decor to buying gifts, Connecticut consumers usually end up spending a significant amount of money during this time of year. However, with income remaining fairly stagnant and consumer spending going up, some people might inadvertently find themselves in financially-strained situations. For these individuals, bankruptcy could be helpful.

Economists predicted that American spending would rise by .5% in July 2019. Spending actually grew by .6%. Personal consumption expenditures — PCE — accounted for .2% of that increase. This rise in spending might have been offset by the slight decrease in food prices, but energy services and goods rose significantly.

Despite the increase in spending,l incomes are not keeping up pace. Although wages rose .5% in June 2019, they barely budged .1% the following month. Personal savings are also suffering, as American consumers had $1.32 trillion in savings in June of this year. By July, savings had dropped to $1.27 trillion. This is the lowest level of personal savings since Nov. 2018.

Connecticut consumers may end up spending beyond their means for a number of reasons. For example, a person might not receive an expected raise that he or she had been planning for. In other situations, spending is unavoidable, especially when it comes to things like purchasing food. No matter the reasons behind a person’s spending habits, he or she still deserves a second chance. Bankruptcy offers that second chance by providing an opportunity to discharge debt for a new financial start.