According to a recent Wells Fargo Money Study, 76% of Americans intend to reduce their spending in 2025. Wells Fargo Head of Advice and Planning Michael Liersch joins Wealth host Brad Smith to examine this consumer trend and explore where Americans are redirecting their money.
Liersch identifies younger generations — those in their 20s to 40s — as leading this spending reduction movement. Rather than simply cutting back, these consumers are strategically reallocating funds toward investment opportunities, with many expressing that they "want to save and invest more this year."
The spending pullback is most evident in discretionary categories such as travel, vacations, and home-related expenditures, including renovations and relocations. Liersch explains: "There's just a lot of uncertainty in the market right now, and people are trying to make those good trade-offs so that they can sustainably meet their savings and investing goals."
"People want to align their values with their spending rather than just going through life and doing things just out of convenience," Liersch tells Yahoo Finance.
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Watch the full interview above for practical advice on resetting your financial habits in 2025.
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This post was written by Angel Smith