New research by Money Anxiety shows that since the beginning of the Great Recession, consumers shifted more of their bank deposits to liquid accounts, such as checking, savings and money market, which can be easily accessed and withdrawn without delay or penalty. Currently, consumers hold $8 of every $10 in liquid bank accounts, up from $6 of $10 prior to the Great Recession. As of the end of 2013, $8.2 trillion out of $9.8 trillion in consumer deposits were held in liquid accounts according to the latest data from the FDIC.
The phenomenon of piling up readily-accessible money is well established in behavioralogy – the science of consumer financial behavior. When the level of consumer financial anxiety is relatively high, as it has been since the beginning of the Great Recession, consumers want to feel that their money is safe yet accessible to them right away in case of a financial emergency such as loss of job or unexpected expenses. This financial behavior is called “Mattress Money” because psychologically it is accessible just like having money under a real mattress
Behavioralogy categories consumer financial behavior in six distinct behavioral patterns - three for consumer spending and three for savings. Each behavioral pattern defines how consumers behave during high, normal and low levels of money anxiety. During high level of money anxiety, consumers tend to reduce spending and hoard more of their money in easily-accessible bank accounts – hence Mattress Money. The other types of financial behavior patterns are Power Play, Rate Race, Durable Diet, Tiny Treats and Castle Craze. A detailed description and empirical examples of each of these financial behaviors are available in the Money Anxiety book