Four Trends Making Budgeting More Important Than Ever

Four trends challenge individuals to stretch income to cover increasing demands, making budgeting critical.

December 04, 2017

Achieving financial wellness and setting yourself up for future financial success, including preparing for retirement, should be a goal for all individuals. A key tenet of achieving financial wellness is the ability to manage current day-to-day finances, including budgeting and reducing debt levels. However, the state of personal finances today indicates that most individuals need help in these areas, with only a third of American households keeping a detailed budget.1

A recent Prudential research study identifies four trends that are influencing consumer behavior in ways that make budgeting more important than ever:

Current trends that make budgeting increasingly important

Social Media

Social media influence is increasing consumer spending, due to customized marketing messages and the influence of peers’ social posts. Consumers who use social media while in the shopping process are four times more likely to spend more than they originally planned than non-users, according to a Deloitte consumer survey. About 47% of Millennial consumers use social media during their shopping journey.2

Cashless Society

An increasingly cashless society increases consumer spending by creating a disconnect between purchases and money leaving your wallet. Credit cards make it easier for people to spend more for discretionary as well as non-discretionary items, and the growth of mobile payments may further disconnect a purchase from a physical drawdown of money.

Shift in Employment

Income is becoming more volatile as more people shift to temporary, part-time, and contract work. These arrangements negatively impact both pay and benefits, leaving employees burdened with funding a greater portion of healthcare and retirement costs.

Outsized Expenses

The price of big-ticket items such as home and college are growing faster than income, leading many to assume more debt which reduces their discretionary income.

Having a budget is the first step in taking control of your financial life. Learn how finding the right balance of spending and saving today could help you grow your money for tomorrow using Prudential’s Slice-A-Budget tool.

1 Gallup, "One in Three Americans Prepare a Detailed Household Budget," 2013.
2 Deloitte, “Navigating the New Digital Divide,” 2016.

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