Americans are finally starting to open up their wallets again, or at least rich Americans are. According to a Gallup poll released last week, consumer spending increased by 14% last month, “driven entirely by the surge in upper-income spending.”
The poll found that consumers who earn $90,000 or more a year spent an average of $145 a day in May, which is the most so far this calendar year and a 33% increase from April where they averaged $109 a day. By comparison, consumers earning less than $90,000 spent $59 a day in May, which is the same as what they spent the previous month and consistent with their daily expenses for the rest of the year.
Gallup notes that these numbers may be an indication that wealthier consumers are tired of trying to cut corners and may be feeling “frugality fatigue.” Not surprisingly, Americans with smaller paychecks are more hesitant to throw caution to the wind, but they too may follow suit if the economy continues to show signs of improvement.
However, this data does raise the question of what is an appropriate amount to spend each day or each week. Americans have been in the grip of a bad recession now for several years that has caused them to cut back spending often to extremes. One blogger recently completed a month-long experiment where he spent just $1 a day on food. And, as we’ve reported before, another man is currently in the midst of a competition to live entirely off of coupons for a year.
On the other hand, there are notorious examples of wealthy people spending grotesque amounts of money on a regular basis. Back in 2008, one woman confessed while getting divorced from her rich CEO husband that she spends an average of $53,000 a week (or about $7,500 a day, give or take a bottle of expensive wine).
As a general rule, MSN Money recommends setting aside 20% of your after-tax money for savings and repaying debts, and dividing the rest between your wants and your needs. So let’s say you end up with $30,000 a year after taxes, 401(k) payments and the like. Based on this logic, you would be able to spend about $66 a day.
What is your personal philosophy for daily spending? Do you have an imposed limit on what you can spend or does it vary from week to week?
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