Americans Are Loaded With Cash, But With Nowhere to Spend It
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What is the main topic discussed in this episode?
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Here's your money briefing for Monday, January 24th. I'm J.R.
Why do Americans have $1.6 trillion in excess savings from the pandemic?
Whalen for The Wall Street Journal. Imagine having piles of cash and nothing to spend it on.
How did Dr. Ann Kier‑Schroeder plan to use her pandemic savings to help family and downsize?
Americans have amassed record savings since the early days of the pandemic, but just as they're ready to start spending again, high inflation, supply issues, and continued fears over COVID-19 variants are keeping their cash on the sidelines.
We really underwent a lot of shell shock. Even though the emotional part of our brain said, this can't be happening, the financial part of our brain said, wow, this is more increase than we had allowed for.
That's Texas resident Dr. Ann Keir Schroeder. She's one of the many people whose spending plans have been frustrated by factors outside their control. We'll talk with her and our personal finance reporter Veronica Dagger about it after the break.
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Why did building a new house cost Dr. Ann and her husband far more than expected?
The pandemic has put $1.6 trillion in excess savings in Americans' bank accounts. And much to the chagrin of those savers, most of it is still there. You see, people want to start spending again, but 7% inflation and supply issues due to the pandemic are ruining their plans. In a moment, we'll talk with WSJ personal finance reporter Veronica Dagger about it. But first, we're joined by someone who's in exactly that position, Dr. Ann Keir Schroeder. She and her husband are in their 70s and live in Magnolia, Texas, just outside of Houston. Hi, Anne. Thanks so much for joining us.
Thank you.
So, Anne, tell me what you and your husband were planning to do with the money that you saved up.
Well, we planned for retirement with it, and we retired two years ago. My husband had some health problems at the time, doing much better now. So we decided to go ahead and retire when our university gave us a buyout option. So with all of that, we have a nest egg. We're able to use some of that in Social Security and live quite comfortably. But about, well, midsummer, my daughter, who lives at that time in Katy, Texas, a suburb of Houston, received an offer from a very, very famous school here, John Cooper.
What practical challenges are builders citing when quoting fixed prices today?
In order to do that, they needed to move. And so they started looking for homes that were in the opposite part of Houston. And so we decided, well, with the health problems and us being about an hour and a half away, why don't we sell our home in order to help them, and then we'll find something closer to them. We got our asking price, and it sold for 1.5 million, which down here is pretty good. So anyway, we had an RV. So we decided that's no problem. You know, we'll just go ahead and help them out with their house. And we'll have plenty left over for us to build a small home or buy a small home in downsize. So it was about $750,000 for their house, which we paid cash for. And that left us $850,000 to be able to build a home.
But like everything else, the cost of building a house has also gone up. And we have you in a WSJ story talking about how builders told you the house you had in mind would actually cost more than a million dollars.
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Chapters
6 chapters
1
What is the main topic discussed in this episode?
0:00–0:39
2
Why do Americans have $1.6 trillion in excess savings from the pandemic?
0:39–0:44
3
How did Dr. Ann Kier‑Schroeder plan to use her pandemic savings to help family and downsize?
0:44–2:00
4
Why did building a new house cost Dr. Ann and her husband far more than expected?
2:00–3:10
5
What practical challenges are builders citing when quoting fixed prices today?
3:10–8:44
6
How are supply‑chain issues and inflation preventing people from spending their savings?
8:44–12:58
Speakers
3 identifiedMore from WSJ Your Money Briefing
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