What Your Checking Account Says About the Economy

The news from Wall Street is always a bit of a rollercoaster, these days more so than ever. Even though things sound a bit dire, millennials are doing okay in one regard: We're starting to get better about saving. Because economics is the dismal science, however, even that might not be the good news you'd hope.

If you've got a comfortable nest egg in your checking account but nowhere else, it may be because you're certain that the economy will let you down. That's according to an analysis by Moebs Services, which looked at correlations between deposit reports at banks and Federal Reserve monetary data. For 23 of the past 30 fiscal quarters, the average consumer has increased their balance in checking accounts. In short, we're hoarding money — "warehousing it," as some economists put it.

In 2007, just before the market crashed, the average consumer had less than $1,000 in checking at any given time. When the economy is good, it's a sign of confidence, as well as spending and investing. But today, the average checking account user keeps more than $3,700 on hand. With stagnant wages and uncertain job prospects already muddying the waters, a volatile stock market isn't tempting most millennials to put their money to work.

We may be approaching a market correction (or a crash, call it what you like) again, but there are ways to ride out the choppy waters. One of the best is by starting small, and keeping your investments spread out over a number of options. It's tempting to pull the modern equivalent of money in a mattress, but the overall health of the economy might depend on choosing a little risk instead.