Spending, personal income up in August

With consumers spending more and seeing higher wages, borrowing activity may increase in the coming months. As expenditures pick up, Americans open themselves up to financial difficulties, which is why short term lenders may want to prepare for an influx of applications.

August saw spending increase for the fourth consecutive month, with a 0.3 percent bump in household purchases, according to the U.S. Department of Commerce. Incomes were up 0.4 percent - the biggest jump in six months. The combination of rising home and stock values, coupled with an improved jobs market, helped fuel the wage gain. However, Federal Reserve Chairman Ben Bernanke said there is still some work to do in the employment situation.

"Conditions in the job market today are still far from what all of us would like to see," Bernanke said. "The committee has concern that rapid tightening of financial conditions in recent months would have the effect of slowing growth."

Strong home value appreciation fueling household wealth
One of the major factors boosting Americans' ability to spend more money is rising home values. According to the August Zillow Real Estate Market Reports, values jumped 0.4 percent from July and 6.6 percent year-over-year. This was the largest gain since July 2006, when values were up 7.9 percent on an annual basis.

"August marked the end of one of the hottest summer home shopping seasons in years, as home value appreciation rates continued their rocket ride upward – perhaps dangerously so in some metro areas," said Zillow Chief Economist Stan Humphries.

Moving forward, appreciation is expected to slow a bit, but still remain strong enough to improve household wealth. The Zillow Home Value Forecast projects 5.2 percent growth for the 12-month period ending August 2014.

Short term lending demand may pick up with spending increase
Now that consumers are spending more money, people could find themselves in trouble if an unexpected expense arises. For instance, after purchasing new appliances, a car breaking down could lead to financial troubles.

However, short term lending can help consumers get through these trying times. Anyone at risk of missing a payment on an essential expense can turn to this type of loan for assistance. They can receive funds quickly, and avoid any late fees or penalties on credit card or utility bills.