Michiganders Are Big Spenders in Some Areas, About Average of Others: WalletHub

A new ranking by the personal finance service WalletHub shows Michiganders are big spenders in some areas – ranking third in personal expenditures on health-care and all other areas – and about average and just below average in others.

Analysts examined personal spending in 10 key metrics, such as personal spending on various categories, the number of cars per household, and auto and credit card debit for its 2014’s States with the Biggest Spenders ranking.

Here are the findings for Michigan:

• 17th – Personal Expenditure on Food & Beverages
• 24th – Personal Expenditure on Gasoline & Other Energy Goods
• 27th – Personal Expenditure on Housing & Utilities
• 3rd – Personal Expenditure on Health Care
• 3rd – Personal Expenditure on All Other Consumption
• 22nd – Auto & Credit Card Debt
• 16th – Percent of the Population Spending More than They Make
• 11th – Annual Consumer Savings Account Averages

Note: Cost of living and income adjustments were made.

Between 2010 and 2020, global spending will increase 43 percent from $28 trillion to $40 trillion, according to a report from consulting firm A.T. Kearney. And the U.S. will account for an entire quarter of the growth pie.

While the Great Recession continues to permeate the air in parts of the U.S., the rest of the country is sweeping away the remaining economic cobwebs from the crisis. This past October, the Federal Reserve’s “Beige Book” reported all manner of improvements: jobs expanding, industries growing, consumer spending on the rise.

WalletHub said all this good news supports the “wealth effect,” a fancy term that describes consumers’ tendency to spend more as they earn more. But it was precisely this “perceived wealth” that enabled Americans to bite off more than they could chew, leading the country on a path to the most destructive economic catastrophe in recent history.

As of June 30 this year, total consumer debt stood at $11.63 trillion, higher than it was at the same time in the previous three years, according to the Federal Reserve Bank of New York.

That fuels fears that Americans are at risk of becoming financially overextended again, WalletHub said.

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