Household habits rocked by falling wealth

03.14.09
By Timothy Jones

New figures from the Federal Reserve show that Americans lost shocking amounts of wealth during 2008.

The U.S. central bank reports that household net worth decreased by $11.2 trillion dollars last year.

Household net worth is defined as the difference between the value of a family's assets and their liabilities.

Shrinking retirement nest eggs and plummeting investment account balances are forcing a number of older Americans to return to the workforce - if they can find a job - or push off retirement until they can rebuild some of their wealth.

Consumer spending patterns have also changed significantly since the onset of the recession. Households are saving more money in case one or more earners losses a job or a family is hit with unexpected healthcare, mortgage or auto expenses.

Consumers have changed more than their spending habits since the economy began its freefall. Americans are more conscientious about making big purchases and opening new credit accounts.

Today, more so than in recent history, a less-than-stellar credit history can make or break your ability obtaining financing for any number of activities. Consumers are increasingly paying attention to fluctuations in their credit score and seeking help from credit counselors to improve their standing.

More Economic Crisis Articles | News Home | Discuss in our Forum

Consumer spending patterns have changed significantly.