MISSION VIEJO, CA — How much do you spend annually in your household? Incomes are up, but so is the amount residents are spending every month, and over the holidays.
A recent report shows Orange County and SoCal residents are willing to spend more, which is a "sign of prosperity," especially coming out of an economic downturn, the Orange County Register reported. However, the stubborn lack of growth of local incomes suggests that higher spending might equal stretching our local household budgets pretty thin.
Once a year the federal government releases data detailing how much Americans spend. Its part of the math that calculates the Consumer Price Index, and it’s quite detailed, tracking costs ranging from housing to dining out to gasoline to school books, doctor visits and recreation.
The latest expenditure tally shows consumer spending for the average household in Los Angeles, Orange, Riverside and San Bernardino counties grew by an average $11,659 in five years — to $66,971 a year in 2016-17 vs. $55,312 in 2011-2012, The Orange County Register reported.
That 21 percent gain is a heady recovery from the penny-pinching days just after the Great Recession ended. And it shows Southern Californian households spent 14 percent more than the typical American in 2016-17.
The buying binge is also is the result of the region’s surging costs of living, expenditures that create financial stress.
A key challenge for locals balancing the family checkbooks is that in these same five years the average Southern California incomes rose just $9,469 – – only 10 percent — to $76,471 from $69,562. That means local households earned just 3 percent more than the average American in 2016-17.
So what drives the higher spending by Southern Californians? Our homes, for one. Southern California’s housing expenditures run 26 percent above the $19,360 spent nationally. That translates to housing being 36.3 percent of local expenditures vs. 33 percent nationwide.
According to The Register, key areas of additional spending include:
$3,460 more on housing — a 17 percent jump to $24,310 spent per year. $2,890 more on personal insurance and pensions; $1,240 more on healthcare: $1,210 more on food; $880 more on transportation; $540 more on education; $360 more on entertainment; $140 more on personal care products and services; $50 more on tobacco products; $40 more on reading;
What reduced from area budgets? according to the report, SoCal residents spent $10 less on apparel and services and $10 less on alcoholic beverages.
So, are you spending more or trimming back your budget in 2019?
City News Service, Patch Editor Ashley Ludwig contributed to this report.