American Consumers Can Look Ahead To Better Times If They Rein In Spending

After experiencing the worst economic recession since the second World War, American consumers have certainly learned a valuable lesson this past year. As the end of the year comes, many American consumers are going to want to be more financially stable in 2010. What they need to do is to rein in spending.

The past practices of American consumers of uninhibited, free wheeling spending on their credit cards is definitely out if they want to keep financially afloat in the following year. Credit card debt is one of the worst things to get into at the moment. What American consumers need to focus on is managing actively their personal finances to keep spending, especially credit card spending, in check.

As a matter of fact, there has been a widespread change in the spending habits of American consumers, as shown by the shopping trend that retailers and banks saw during this year’s holiday season. Consumers are focusing more on spending money at hand, using cash, debit cards and checks and moving away from spending money they expect to have which is basically credit card spending.

There are some indications that the American economy may be on the way to recovery. Last November, retail sales rose up by 1.3% and some analysts actually predicted that American consumer spending would pickup during the holiday season as a result. The net worth of Americans also picked up by 5%, rising to $53.4 trillion during the last quarter. That was also the second straight quarterly increase that American net worth saw.

However, the recovery of the economy is still in its infancy and American consumers would do well to remain a bit more reserved.

At the moment, there are still 15.7 million Americans without jobs. Ever since December 2007, the start of the recession, the number of Americans who lost their jobs numbered more than 7 million, leading to the rise of unemployed Americans to 15.7 million. The rise in American net worth, though seen as a positive sign, still remains far below the peak that Americans saw before the recession began which was a net worth of $64.5 trillion.

To remain ahead financially during 2010, American consumers are going to need to reevaluate their spending goals. Credit card spending should be put under control and should be tracked closely, especially with the changes that credit card companies are bringing as the new credit card legislation gets activated come February.