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Money Talks | Are you noticing more or less 'discretionary' cash?

Are Americans finding that their dollar isn't going as far? And perhaps that they have too much month left at the end of their money?

TEMPLE, Texas — Tough talk on what your money is actually worth. 

The more discretionary cash you have, odds are the more likely you are going to be content with your income. So really, the salary you make is just a number. The real question is how are you living? 

And when it comes to discretionary income, how much do we have? And for that answer we turn to Investopedia. 

According to Investopedia, discretionary income is the amount of income a household or individual has to invest, save, or spend after taxes and necessities, like student loans or credit card debts, are paid.  

Pre-COVID in 2019, the average American family had $20,748 per year to spend any way that they like. In other words, the average household has about $1,729 left over after paying the bills each month. 

Certified Financial Planner Neil Vannoy explains why that number has been growing, telling 6 News, "Thanks to generous government programs many Americans are coming out of the COVID lockdowns with more money. In fact, the savings rate tripled during the first 2 quarters of 2020 which is unusual during a recession."

Remember in March of 2020, we went into a bear market. But with all of the stimulus and money that the government spent and gave to people, even those whose employment wasn't affected, really stimulated the economy, and had us zooming by June. 

Neil told us, that was a very short recession, also saying, "On one hand, the COVID-related spending we've seen over the past 18 months has been a huge benefit for individuals who have jobs and has helped reduce the negative impact that the shutdowns have had on the overall economy."

We have dodged a bullet, but our country took on a great deal more debt to do so. Rising costs in goods and services are now being felt by consumers. Neil explains, this spending has increased our country's debt, could lead to inflation and lower long-term growth for the economy.

The Federal Reserve is now saying that inflation might be here through 2022, the long-term effects of which remain to be seen. 

Neil told 6 News that things are changing from the rather low inflationary times we saw in 2020. "There was a slowdown in inflation in 2020 due to the short COVID-related recession, and this helped the purchasing power of workers. Hopefully the inflation we've seen recently will be short-lived so the gains that many workers have experienced aren't wiped out."

If costs go up due to inflation, but your salary doesn't keep pace, your discretionary income will go down. 

In a recent CNBC poll 71% of Americans answered that they believed that we were not on the right track when it comes to the economy. That hurts consumer confidence as well.