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Daily Capital

Life Changed Drastically in 2021—Here’s How That Showed Up in Our Wallets

Over the past 12 months, our “new normal” has been seemingly normalized and consumers have found themselves, yet again, adjusting to changes at home and at work.

Not surprisingly, major tide shifts like the Great Resignation, hybrid work environments, and unemployment rates on the mend have resulted in changes in how we spend money. Rising gas prices, for instance, may have impacted commuters more than those who work from their living rooms. Meanwhile, monthly child tax credits of $250 to $300 may have supplemented other households’ savings goals, freeing up cash to pay for everyday necessities.

Ahead, we take a look at Personal Capital spending data from the past 12 months — from December 1, 2020 through November 30, 2021 — comparing the top spending categories of households across the country. We also analyze 2021 spending around key holiday shopping dates compared to years past.

The data ahead is a snapshot of all Personal Capital users with recent login activity, who registered prior to or on Jan. 1, 2021.

Top Spending Category: General Merchandise

We know that “general merchandise” is, as the name suggests, a broad umbrella category including everyday purchases on Amazon and at Walmart or Target. Think of most non-food items like batteries, toothpaste, toys, storage containers, bed linens, etc. in this category.

Personal Capital data shows that users spent $2.4 billion on general merchandise in 2021, which works out to an average of $8,300 per person who spent in this category.

Here’s how that broke down by age:

  • Users in their 30s spent on average $8,000 per user
  • Users in their 40s spent the most (per user) here, averaging $10,700 per user
  • Users in their 50s spent on average $9,100 per user

Single transactions averaged $69, with the top merchant being Amazon and Amazon Marketplace. Personal Capital users spent $959 million in total at the online mega-retailer, and the average transaction came in around $47.

2nd Highest Spending Category: Restaurants

How much do you spend on a night out to eat? Our data shows that restaurants were the second-most expensive spending category in 2021, which makes sense given the amount of takeout consumers ordered in between Zoom calls.

This year, users spent a total of $1.7 billion on restaurants. That works out to an average of $5,900 per user who spent in this category. Once again, users in their 40s spent the most per person:

  • Users in their 30s spent on average $6,100 per user
  • Users in their 40s spent the most (per user) here, averaging $7,100 per user
  • Users in their 50s spent on average $6.5k per user

The average transaction value for restaurants was $151 — higher than we expected since the top merchant recorded was Uber Eats. But then again, there’s nothing wrong with treating the family to a sushi night in or taking your loved one to a heated patio to enjoy outdoor dining. Consumers spent $43 million on Uber Eats transactions ($486 per user), and the average transaction value for Uber Eats alone was $30.

3rd Highest Spending Category: Travel

If you had cabin fever this year, you weren’t alone. Our data shows Personal Capital users spent $1.6 billion on travel in 2021, which works out to $5,800 per person.

If that sounds high, it’s because the travel spend in 2021 grew by 55% year-over-year compared to 2020. In fact, travel spending doubled just a few months after quarantine, from Jan. 2021 to June 2021.

People in their 40s once again took the prize for the highest vacation spending:

  • Users in their 30s spent on average $5,700 per user
  • Users in their 40s spent the most (per user) here, averaging $7,500 per user
  • Users in their 50s spent on average $7,300 per user

The top travel merchant in 2021 was Airbnb. Users spent an average of $2,600 per person on Airbnb transactions that averaged $786 each.

Other 2021 Findings

The top month for 2021 spending was October. Users in their 40s spent $5,000 on average for the month and saw spending hikes in all categories across the board.

Meanwhile, those in their 30s had a drastically different spending picture compared to users in their 20s. Some categories increased almost 2x, which definitely showed how quickly the increased financial responsibilities of the 30s can leap.

Here’s a snapshot of user spending the 20s age range, compared to the 30s:

Spending Category 20s – Average Yearly Spend 30s – Average Yearly Spend
General Merchandise $4,800 $8,600
Restaurants $4,700 $6,100
Travel $4,100 $5,700
Groceries $2,900 $5,100
Clothing/Shoes $2,700 $4,100
Home Improvement $1,500 $3,200

Spending Around Key Dates in 2021 vs 2020

Aside from general spending, you may be wondering how holiday shopping in 2021 compared to 2020.

This data looks at slightly different data than above. It includes users with login/transaction activity in Black Friday / Cyber Monday in both the prior year and current year. We looked at the categories of Clothing/Shoes, Electronics, Entertainment, General Merchandise, Gifts.

Here’s how spending broke down.

Black Friday

Year Total Spend Transactions Users w/ Transactions Amt per User Amt per Transaction
2021 $23,678,386 231,957 112,107 $211.21 $102.08
2020 $21,429,737 224,965 108,402 $197.69 $95.26

Cyber Monday

Year Total Spend Transactions Users w/ Transactions Amt per User Amt per Transaction
2021 $22,307,142 240,906 115,304 $193.46 $92.60
2020 $21,766,129 250,152 115,012 $189.25 $87.01

As you can see, users as a whole spent a little more this year for both Black Friday and Cyber Monday shopping. As Personal Capital saw in its 2021 holiday spending survey by Morning Consult, more than one-third of people planned to reduce their general spending this year to make room for holiday gifts.

Here’s how Americans planned to adjust their cash flow in quarter four, according to the survey:

  • 11% invest less money
  • 19% put less money into savings
  • 7% reduce retirement contributions
  • 9% hold off paying off existing loans or credit card debt
  • 38% reduce leisure purchases (e.g. eating out, day trips, other non-essential purchases)
  • 10% reduce or stop charitable contributions/donations
  • 1% other
  • 40% none of these

If you had planned on finding wiggle room in your budget this year, but are looking ahead at debt this January, it’s never too late to get back on track.

The Bottom Line

Budgeting your money is just one part of your overall financial plan. You can take a few actions now to get yourself on the right track. With Personal Capital’s free Better Financial Life guide, you can learn insights from fiduciary financial advisors.

Another option is to sign up for a free and secure online budgeting tool such as the Personal Capital Dashboard. Millions of people use this fintech app to set up budgets, track savings progress, and see every financial account in one place.

Get Started with Personal Capital’s Free Financial Tools

 

Author is not a client of Personal Capital Advisors Corporation and is compensated as a freelance writer.

The content contained in this blog post is intended for general informational purposes only and is not meant to constitute legal, tax, accounting or investment advice. Compensation not to exceed $500. You should consult a qualified legal or tax professional regarding your specific situation. Keep in mind that investing involves risk. The value of your investment will fluctuate over time and you may gain or lose money. Any reference to the advisory services refers to Personal Capital Advisors Corporation, a subsidiary of Personal Capital. Personal Capital Advisors Corporation is an investment adviser registered with the Securities and Exchange Commission (SEC). Registration does not imply a certain level of skill or training nor does it imply endorsement by the SEC.

Megan DeMatteo is a former CNBC money reporter and Pushcart-nominated poet. She now contributes to various publications with a specialization in personal finance.
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