Of those who are spending less, nearly 30 percent (28 percent) said they consider their newfound thriftiness to be the new normal.
Based on a new Gallup survey of consumer spending trends, the brassy showstopper from the musical Sweet Charity might be more aptly titled, “Hey, big saver” instead of “Hey, big spender.”
Americans self-report that they prefer saving money over consumer spending by 62 percent to 33 percent. Prior to the 2008 economic collapse, Americans were more even divided on their spending and saving attitudes.
The survey, Gallup reports, “reinforces the psychological effects the financial crisis and the deep recession have had on Americans.” In early 2009, even as the percentage that preferred saving money had risen to nearly six-in-10, household debt as a percentage of GDP hovered around 98 percent. Over the past five years, with the preference for saving over consumer spending trending upward, household debt has fallen to 81 percent, according to Federal Reserve data.
Self-reported consumer spending is up overall this year, but Americans don’t necessarily perceive of themselves as spending more. Four-in-ten said they are spending less in recent months than they used to, while 28 percent said they are spending more and 30 percent said they are spending the same amount.
Of those who are spending less, nearly 30 percent (28 percent) said they consider their newfound thriftiness to be the new normal as opposed to temporary (12 percent). Conversely, of those who self-report they are spending more than usual are less likely to see this situation as a new pattern (11 percent), while 17 percent regard it as a temporary change in consumer spending patterns.
Consumer spending accounts for 70 percent of the economy. It remains to be seen how the economy adjusts to the recession-fueled attitude adjustment toward saving. Saving vs. spending is an issue that usually takes on added significance this time of year, not only as consumers consider how much to spend on gifts, but also in making New Year’s resolutions. In a survey of Affluent investors conducted last year at this time by Spectrem’s Millionaire Corner, the highest percentage (roughly 40 percent) identified spending less as one of their financial New Year’s resolutions. Three-in-10 said they intended to save more, while one-fourth pledged to reduce their debt levels.
Donald Liebenson writes news and features for Millionaire Corner. He has been published in the Chicago Tribune, The Chicago Sun-Times, The Los Angeles Times, Fiscal Times, Entertainment Weekly, Huffington Post, and other outlets. He has also served as a marketing writer for Chicago-based Questar Entertainment and distributor Baker & Taylor.
A graduate of the University of Southern California, he is married with a college-age son. He also writes extensively about entertainment.