Almost half of U.S. consumers expect to spend the same or more money in the next 30 days as they did the previous 30 days, according to the American Express Spending & Saving Tracker.
When asked where their money will go, the 49% of the general U.S. population who will spend the same or more money in the next 30 days as in the previous 30 days listed areas including:
- Groceries – 52%
- Child/elder care – 50%
- Medical bill/healthcare – 49%
- Auto expenses – 48%
- Entertainment – 47%
- Dining out – 45%
- Loans/credit card payments – 44%
- Tax payments – 44%
- Education – 43%
Consumers Want to Save
Despite short-term spending plans, U.S. consumers are setting a goal to save money during 2010. According to the Spending & Saving Tracker, 89% of the general population has set a clear financial goal for the year and 83% has a specific savings strategy in place, with a goal of saving on average $14,000 this year and $1,200 in the next 30 days.
Consumers Build Savings Strategies
Rather than simply saying they want to save more money this year, consumers are developing specific strategies to save their money. Eighty-three percent of the general population has a defined strategy in place. Popular strategies include:
- More than half (54%) of the general population, 59% of affluents and 68% of young professionals will rely on primary income.
- Thirty percent of the general population and 42% of young professionals will cut back on extra purchases such as “morning lattes” and “manicures.”
- Forty-five percent of young professionals will use tax returns to boost savings, compared to 25% of both the general population and affluents.
- Nineteen percent of the general population will sell used items.
- Fifteen percent of the general population will take a second job.
- Six percent of the general population and 28% of young professionals will use part or all of a bonus.
Several other recent reports on consumers’ economic behavior suggest that consumers are likely to moderate or decrease spending in the coming months while boosting savings:
Consumers Spend, Earn, Save More
U.S. consumers’ personal consumption expenditures (PCE), which essentially reflect consumer spending, increased $45.7 billion, or 0.5%, in November 2009, according to Bureau of Economic Analysis figures. Consumers tempered their increased spending by keeping it close to the percentage by which their income rose during the month. Consumer’s disposable personal income (DPI), representing personal income less current personal taxes, rose $54.1 billion, or 0.5%.
In addition, personal saving increased 1.6% in November 2009, growing from $516.7 billion to $525.1 billion.
Consumer Credit, Borrowing Continue Retracting
In a reversal of a 2.6% increase in non-revolving U.S. consumer credit during October 2009, non-revolving U.S. consumer credit fell at an annual rate of 3% in November 2009. In addition, total U.S. consumer credit decreased 8.5% in November 2009, while U.S. revolving consumer credit sharply fell 18.3%. According to the Federal Reserve, consumers are also reducing their borrowing. During October 2009, consumer borrowing dropped about 36.5%, from $741.3 billion to $718.7 billion, continuing a general pattern of consumer borrowing decline that has existed since early 2008.
Energy Prices May Limit Consumer Spending
Following six straight months of growth, the Deloitte Consumer Spending Index dropped slightly in December 2009 due to the impact of rising energy prices on real consumer wages. The Index dropped 0.6%, from an adjusted score of 4.66% in November 2009 (which marked a five-year high) to 4.63%.
About the survey: American Express Spending & Saving Tracker research was completed online among a random sample of consumers aged 18 and up The research sample of 2,088 adults surveyed the general U.S. population, as well as two sub-groups – the affluent and young professionals. Interviewing was conducted by Echo Research between January 5-11, 2010.