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Featured Advisor

Srbo Radisavljevic
Managing Principal/Investment Advisor

Edge Portfolio Management


State: IL

At Edge, a low client to advisor ratio allows for personal and customized service for each individual.  Our goal is to work as a team for each client to provide not only portfolio management but wealth coordination and financial planning.  We make every effort to have frequent communication with our clients and to provide timely response to calls and emails.  I also enjoy spending time with my wife and three kids, following Chicago sports, enjoying ethnic cooking, and serving as a school board member for Norridge School District 80.

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Consumers Save More, Spend Less

Personal income rises in January

The sight of crowded shopping malls in December had policy analysts and retailers questioning whether the hard lessons many debt-ridden consumers learned during the Recession would leave a lasting impression. Leaders remain poised to see whether increased consumer spending, which accounts for about two-thirds of the nation’s economic productivity, will speed the economic recovery.

The latest numbers from the U.S. Department of Commerce show that spending is essentially flat when adjusted for inflation, but saving is up slightly from December. When adjusted for inflation, consumers spent 0.1 percent less in January than they did in December when a flurry of holiday shopping boosted consumer spending to an annual increase of 2.6 percent.

Personal income rose in January, thanks in large part to a 2 percent cut in Social Security taxes, but Americans aren’t rushing out to spend the extra take-home pay, described by some as a raise from Uncle Sam. The rate of personal savings increased to 5.8 percent in January compared to 5.4 percent in December.

It appears Americans are still paying for the grand party that led up to the Recession. Despite more sober spending in the last two years, total U.S. consumer debts stands at $2.4 trillion. Revolving debt, which primarily reflects credit card balances, stands at $800 million, according to Federal Reserve data. According to, which tracks the industry, the average credit card debt per household with a credit card is $14,750.

Investors interviewed by Spectrem Group in December were highly motivated to increase their savings and reduce their debt. One-third of Mass Affluent investors said the Recession had prompted them to reduce debt levels and 28 percent they had increased savings. Mass Affluent investors have $500,000 to $1 million in net worth, not including their primary residence. Nearly 40 percent of the Mass Affluent have credit card balances that average $11,660. Total debt, including car loans and first and second mortgages, averages $223,270.

“The Recession has caused some behavioral changes within the Mass Affluent,” said Catherine McBreen, Spectrem’s managing director. “The primary shift is around attitudes toward debt. We expect to see Mass Affluent investors choosing saving and investing over spending through 2011.”

The Recession seems to have had the biggest impact on younger investors who are more likely than older investors to have all types of consumer debt. Forty-five percent of investors younger than 50 plan to reduce their debt by up to 25 percent in 2011, and 31 percent plan to reduce their debt by 26 percent to 50 percent.

The subject of credit card debt is considered highly taboo, according to a survey conducted in January of 2009. Consumers said they would rather discuss their weight, monthly mortgage or income than their credit card debts. Respondents were just as likely to tell a total stranger the details of their sex life as they were their credit card balance.

Americans who overcome their reluctance to grapple with debt issues can find help from consumer advocacy groups and software apps that help users pay down debt and create household budgets.