Most people get regular paychecks from their employer, and it would stand to reason that they would spend that money at regular intervals as well. Instead, economists have long known that consumer spending tends to increase shortly after the consumer receives a payment.
Why is that? It's not so much that people are eager to spend that money because the cash is burning a hole in their pockets. In a new paper in the journal Science, researchers report that spending on treats and restaurants increases just marginally right after most people's payday.
Instead, what the researchers found is that nearly half of the increased spending that Americans make after receiving their paychecks is in the form of recurring payments such as rent or mortgage bills. It's not that we're being profligate or self-indulgent; it's that we've planned our financial lives to be in sync with when we get paid. Another bright idea on the part of the American consumer.
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