U.S. consumers say spending habits changed for good

Source: Reuters

SEATTLE (Reuters) - A majority of U.S. consumers say they have permanently changed their spending and savings habits in response to the global financial markets crash and recession, according to a Citigroup survey released on Friday.
About 63 percent of Americans polled said the way they spend and save has "forever changed" due to the downturn. Only 29 percent said they would go back to their previous patterns of spending and saving.

Eighty percent of consumers making less than $50,000 said they would most likely cut back on everyday expenses, while 68 percent of those earning $75,000 to $150,000 said they would make such cuts, according to the survey.

Across all income levels, 62 percent of people said they had cut back on credit card purchases, with 61 percent saying they would continue to do so.

And 57 percent of people surveyed said they had already cut down their debt, while 63 percent said they planned to do so in the future. Thirty-four percent said they were saving or investing more money, while 60 percent said they would invest or save more going forward.

Citi surveyed 2,005 adults nationally between September 1 and September 5. The survey has an overall margin of error of plus or minus 2.2 percentage points.


Read more: http://www.reuters.com/article/domesticNews/idUSTRE58O5EN20090925

is getting pretty serious.

and have found out that people drive up here to dump their animals. :grr:

We called Animal Control to get a trap and a cage and I'm getting familiar with the rescue groups around here. The first drop off I was aware of was a mom cat and three because one night I saw three six week old (approx) kittens running across the road in the dark. I would have gratefully strangled a person at that point.

I'm pretty proud of my half-acre though.

being broke for a lot longer than their attention span ...

Repugnicons obviously (with their chants of "What about MY fill-in-the-blank") embody the "Me Generation" ideals ... It's all about "me" ...

born in June 1963 ...

Theoretically, the "Boomers" are from approx 8-9 months after the end of WWII, to those conceived just before 11/22/1963 ...

The sociological Baby Boom is offset a couple of years from the Demographic boom. The social historians Willian Strauss and Neil how, who have written several books on the sociology of generations and their historical impact defines the Bommers as being born from 1942 to 1960, the former date being, according to Strauss and Howe, the oldest people eligible to be drafted to go to Vietnam. The later date is more diffuse and harder to define, and many people use the term "Generation Jones" for the late Boomers and early Xers, but Strauss and Howe chose 1960 because it would include the youngest people that would have any memory of the JFK assassination and could have really participated in the 70s social movements as teens and the late 70s/early 80s evangelical Christianity as young adults.

after 1943. The first group is more like those born during the Depression and less like 60's hippies. No books. Just a personal observation.

...settled down, got married, and started having kids before "thing started happening" culturally starting around 1964

and those "boomers" who were not born there

Eww, please call things by their proper names. "Repgunicon" sounds stupid. So stupid I just drooled a little reading it.

:shrug:

Have you tried to buy a tube TV lately? Flatscreens are pretty much the entire TV market now. What you'll see is a reversal of the trend toward bigger and bigger screens. People can't afford to turn their living rooms into movie theaters any longer.

I think LED TV's will take over the market soon. I like the 1080P projectors, but I have no room that I can get dark enough to use one. Too many windows.

They were all charging the goods to high-interest credit cards, and if they thought a $4,000 plasma screen was expensive, they haven't seen what 20% interest will do to the true cost of the thing. Only the upper-middle class and middle-class folks with a penchant for dealing in cash would be able to pay such an expense on the spot, in cash or debit or even check.

For the last three decades, people have steadily replaced their eroding incomes with credit that was easy to obtain but expensive to maintain.

i have a 60-inch plasma, and when it goes, i'm not replacing it with a smaller one.
i'm hoping that by then the led or maybe the supposed carbon-fiber ones will be BIGGER and more affordable.

to check out yet another one of these threads and read yet again how absolutely thrifty, financially responsible and perfect some DU'ers believe they are.

You seem to forget the most basic issues involved in the meltdown. Here's a few. Shrinking wages. Jobs paying a living wage offshored, and they're never coming back. The fact that anyone making over $50K per year must buy a house in this country, or the tax man takes everything you just made. Banks cooking the books to the tune of billions of our dollars. When all that's not happening, those with health insurance are going bankrupt because they can't afford the medical bills from catastrophic illness.

Those of you who love to sit back and wag the finger -- life's funny. No matter how much you think you've saved or how "responsible" you're being with your money, one illness or job loss will take care of it.

We paid cash for our 42" television a year and a half ago. We live in a rural area. We don't go to the movies more than once or twice a year. We don't go to concerts (unless they're the "free" kind in the park,) we don't go to the casino. Being able to spend a few hours watching a ball game or funny TV show sure helped when we were out of work for eight and a half months. Any possession is not the Great Satan. What is is to sit back and think that you have it made, and everyone else is stupid.

I'd rather spend my time dwelling on how to help, instead of patting myself on the back. In the meantime, things will NEVER be the same as they were before. We'll all be looking for something different now.

as their spending habits. I was talking with a friend today about this. She and her husband (one income family, he is an electrician making in the avenue of $40-$60T a year) sold their home for $199,000. They had purchased it as an estate sale and it was in sore need of work. Her husband fixed it up, put in an in-ground heated pool in back, fence, cabana with bathroom by said pool, terrace, a little outside room for hot tub, walled in a breezeway to the garage, etc. Every improvement raised their taxes more and more until it became a burden to own. He did all the work himself so the costs for improvement were minimal-- they picked up materials when they were on sale, closeouts etc; he did the work when he was laid off. They also paid off their mortgage, sending in extra payments whenever they could.

Anyway, the home sold for asking price the first day on the market. But then the delays kept coming up. It turns out the buyers (dual income, no kids) one was a Superintendent of schools, another had a district position as principal-- both drove high end cars (Escalade and Navigator). They were having trouble with the financing. Apparently the bank did not want to give them a no money down loan, not that they didn't have the income... easily earning 2-3 times that of the current homeowners... it was their debt load. They ended up getting a $45,000 loan from their parents to use as a down payment. Think on that. Making over 6 figures a year and having to beg your parents for a down payment on a $200,000 mortgage? This couple were in their 40's.

I have to say, that's fucked up, and I'm glad people are being more conscious about their spending.

We have so far resisted the big flat screen hdtv's but may be caving soon as our regular tv is starting to go on the blink. The prices are not horrible. However, we will be paying cash.

how to prepare to ride out the next meltdown.

As far as what caused the meltdown, there were a number of causes, from dismantling of regulations that had been in place since FDR, to hokey mortgage-based derivatives, to insuring those who gambled on hokey derivatives, to Greenspan's former "certainty" that markets would do nothing to hurt themselves, to Bush's drive to make everyone a home owner, to massive greed overriding morals and common sense on the part of everyone from residential real estate appraisers to bond rating companies, etc. These things culminated in the TARP, which itself contributed to the problem, however necessary it may (or my not) have been to avert total global financial collapse. Ditto the stimulus.

As best I can tell, flat screen TVs were not among the causes of the melt down. ;-)

I've never used plastic to finance my life, I eschew the acquisition of possessions as the defining intent of my life, and I have always saved as much as I can. But then, I'm not as much a cause of our present troubles as it seems so many of those in this survey can be held to account.

my debt all comes from a car loan (I live in a town out in the country and have to drive to get to work) and a loan to buy our condo (in the center of town so i can do shopping on foot). If I cant afford it it waits until next month. If I really need it I dip into savings but I hate doing that so even that is rare.

if only so-called "responsible" people like you had leveraged yourself up to the max like a good patriotic american and spent, spent, spent to keep those economic wheels turning, we might have avoided the financial collapse entirely!

... or at least pushed it back by a day or two.



:sarcasm:

...can he get part of the bailout cash? :D

I am very grateful my parents were so anti-plastic; I grew up knowing that what went on that card had to be paid. I am also grateful to have health care and good health and haven't yet been in a situation where I didn't know how I would get my next meal or see a Doctor. That being said, a lot of people were living for today and not putting a dime back and running up those credit cards like the bills would never come in.

I have always lived well within my means.

I do use a BoA UPromise credit card for many purchases (gas, food, clothes, etc), but I pay it off every month. 1% of all purchases go directly into a 529 for my daughter.

It sucks that we as a country had to learn this lesson (again), but it had to happen eventually. As a parent I can only do my best to instill this type of attitude within my daughter. Hopefully many more will do the same.

would be a damn fool to go back to it.

Jobs+Good Pay= More profits for everyone

Even the highest paid CEO wont see any further improvement in their salary so long as the consumer cant afford to buy their products because the jobs are in China or their pay is frozen at a low wage.

It's called "shit where you eat". Once they have reduced all of the United States to Viet Nam... who is going to be able to pay their taxes or their inflated prices?

How can you kill the Golden Goose and expect the goose to lay more eggs?

I'm afraid they have something else in store for us. Listening today to Obama's Nuclear Nonsense on Iran... it's pretty clear ... WE ARE ON OUR OWN.

make it more painful to go broke, and guess what - people stop borrowing so much

I agree that people in the US need to reign in consumer spending, and am glad to see that US citizens plan to do so. Nonetheless, I´m not quite sure that the US´perceived dismal savings rate is as gloomy as it has been made out. 65% of all US workers are actively enrolled in 401(K)´s and IRA´s at any time, and 85% of US workers have some assets in these retirement savings accounts. Does our ´dismal´savings rate take these savings into account? Deposits in such accounts were thought to be about $30 trillion prior to the crisis, lost much of their value thereafter, and have since supposedly gained enough ground that they´re worth about 70% of what they were worth pre- crisis. A healthy savings, by any account.

I suspect that retirement savings accounts are considered retirement plans (and not savings accounts) for the purpose of estimating a country´s saving rate. Yet the US is the only country in the world (that I know of) that offers its citizens this type of savings arrangement. I live in Argentina now (thanks to my IRA), and when I try to tell Argentines what an IRA is, they are bewildered.

If ´savings´ means opening up a plain old savings account, then I admit I´ve never saved a dime. Hell, why would I, when every $1K I put into my ex-employer´s 401K netted me $20K so many years later? Does ANYONE out there know if 401(K)´s and IRA´s are included in calculating a country´s rate of savings? I´d be interested in knowing; I think we Americans might be more thrifty than we are perceived.

That struck me as a really good question, and one I didn't know the answer to, so I looked it up. The Federal Reserve answers this in detail, fortunately for me:

http://www.frbsf.org/education/activities/drecon/answerxml.cfm?selectedurl=/2005/0508.html

Thandk you. Good research.

Interesting to note that the other component of the national savings rate is government savings; i.e., income vs outlays on the part of the gov´t.

We as a society are simply being forced back down to earth after 25 years of consumerist insanity.

I see him on Faux Biz all the time. http://beta.daveramsey.com/ Could he have something to do with it?

And it was the worst of times.