Wealth Effect

I am reading a book about United States Federal Reserve. In Federal Reserve point of view in macroeconomics, when economics is goods people spend more. This we heard a lot, but how in reality.

First, people salary increase. Second, nominal wealth increase, for instance housing /stock value. If a person own a house, and that house's value increase 100,000 dollars, example, an average person will increase 6000 dollars spending that year. To contribute the spending by this nominal wealth increase, they might arrange contract against their homes, through borrowing, or simply saving less form their salary. 

When good economic turns to bad economic, this spending caused by nominal wealth increase can hurt people financial planning very bad. During that time, people salary decrease while still need to pay their credit card payment.