Survey: Consumers Buckle Down

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American consumers who are uneasy about their levels of debt and savings are changing their shopping habits and decreasing discretionary spending, according to a new survey from Citi.

The survey, conducted for Citi (Stock Quote: C) by Hart Research Associates, found that Americans aged 18 and older who are uncomfortable with their level of debt hit 38%, up five points since the quarterly survey was last held in June.

Additionally, the percentage of Americans who say they are somewhat or very uncomfortable with their savings level is now at 52%, an increase of three points since June.

This unease is leading consumers to make adjustments to their spending habits. Nearly half (49%) of Americans said they either avoid shopping altogether or shop only for the things they absolutely need. Additionally, nearly three in four Americans (72%) say they have cut back on their everyday expenses.

“Consumers are telling us they are reluctant to spend,” said Jonathan Clements, director of financial education for Citi Personal Wealth Management. “They want to pay down their debt and focus on their savings.”

Citi has conducted its National Consumer Spending and Saving Survey by interviewing 2,001 adults nationwide in September.

According to the survey, Americans are saving by postponing major purchases and cutting back on entertainment spending. Of respondents, 66% believe it is only a fair or poor time to buy big ticket items, such as furniture, a refrigerator, a car or a television.

Additionally, 59% of Americans are planning to decrease spending on eating out; 51% plan to decrease the amount they spend on clothing; and 50% plan to decrease the amount they spend on vacations. Americans are also finding creative ways to save, as many report cutting everyday expenses by packing their lunch, carpooling, cutting down on gas and electricity use, and growing their own food.

This is not the first time we’ve reported on the emerging prudent consumer. A survey earlier this year conducted by Javelin Research concluded that is on the decline as “cautious consumers” prefer to pay now as opposed to pay later when trying to limit purchases and avoid debt.  

According to Clements, the survey’s results are both good news and bad news. The fact that Americans are becoming more financially prudent indicates that many have learned from past mistakes. However, the economy will have difficulties rebounding if consumers are unwilling to spend.

“The economy is not going to be as robust as we hoped and more families are going to go without a breadwinner,” Clements said.

Want more incentive to not squirrel your money away in a savings account? Check out this MainStreet article that looks at why it doesn’t pay to save.

—For the best rates on loans, bank accounts and credit cards, enter your ZIP code at BankingMyWay.com.

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