South Beach, Miami, Florida — Courtesy: Shutterstock — Mia2you
In contrast to warning stories about high inflation and economic difficulties, U.S. spending is increasing. In addition to our ingrained love of retail therapy, the pandemic and the ensuing emphasis on the here and now have had a significant impact on people’s views toward purchasing. The “You Only Live Once” (YOLO) spending trend is becoming more and more common among consumers, especially younger, affluent groups.
After the pandemic, non-discretionary spending in the United States increased by 22 percent in 2022 over 2018, primarily for housing and other necessities. The increase rate of consumer expenditure on non-essentials was noticeably greater, at 32 percent. The average American spent $12,000 on discretionary goods, which mostly included food and entertainment and accounted for 23 percent of their whole purchasing expenditure. In the meantime, rates of inflation varied, reaching a high of 9.1 percent in 2022 after peaking at 2.9 percent in 2018 and then falling to 3.3 percent in 2024.
Given that overall spending decreased during the 2020 pandemic but increased in 2021, this growth was anything from linear. By 2022, recreational facilities like hotels and restaurants would account for the majority of consumer non-essential spending, with households spending $3,172 on meals and lodging on average. In addition, compared to the preceding four years, they spent 60 percent more on periodicals, newspapers, and stationery and 59 percent more on recreational goods and activities.
Naturally, there are wide regional differences in financial well-being. Wages, patterns of income growth, price indices, and regional spending patterns are some of the main influences on it. This led us to compare the states in the United States. We looked at data from the U.S. Census Bureau and the U.S. Bureau of Labor Statistics to determine which places allow people to live more lifestyle-centric lives. We examined every state in the union and Washington, D.C. across a number of factors pertaining to discretionary expenditure.
Coastal states like Washington and California, along with Colorado and Utah, set the standard for discretionary expenditure. This is probably because of their higher household incomes and strong economic growth. For instance, Utah witnessed the greatest increase of high-income earners in the US during the same period, with a 12 percent increase, and experienced a 25.2 percent gain in income between 2018 and 2022. This could help to explain why residents can spend up to 27 percent of their income on non-essential items, especially leisure products.
Conversely, the southern states of Oklahoma, Arkansas, and Mississippi had the lowest household income, the fewest high-earners, and the lowest spending on discretionary products, placing them at the bottom of the list for financial well-being. Positively, these states also have some of the lowest price indices in the nation.
US discretionary spending: Colorado, Utah, and California work hand in hand to support the lifestyles of high-spending individuals.
In general, Americans in the West appear to be the most adept at making discretionary purchases; Colorado and Utah are at the top of the group. These states’ strong job markets support the average household’s nonessential spending, which accounts for 27 percent of total spending. Furthermore, the economies of both states are robust and offer both the means and the opportunity for leisure expenditure, but they also have populations that are rising, younger, and wealthier and who prefer to spend more on non-essentials.
Where does Florida make the list?
Florida is the sixth most financially stable state in the union, with households devoting 25 percent of their income to non-essential purchases. The Sunshine State boasts the eighth-highest rate of income growth between 2018 and 2022, along with an abundance of retail options that encourage indulgence.
The Greater Miami area is a shopper’s paradise for those eager to enjoy their hard-earned money, offering everything from luxury shopping to hidden gems. It makes sense that it was ranked first on our list of the best places to go shopping. Not to mention the expensive theme parks and opulent cruises that made Florida so well-known.
To see which other states made the list, click here.
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Melissa’s career in writing started more than 20 years ago. Today, she lives in South Florida with her husband and two boys.
