Survey Finds That 40 Percent of Americans Have Checked Their Spending

Worries Over Stock Market and Threat of New Recession Cited as Top Reasons

by Erin Scobie on September 19, 2011

The end of the summer has been full of bad economic news. That trend has continued with the release of a new survey which reports 40 percent of Americans have started spending less. The stock market’s erratic behavior of late and the fears about the US economic future were the chief causes cited by the survey.

According to the study by Bankrate.com, households which have an annual income of $75,000 or more cut their spending by 37 percent while those making $30,000 spent 43 percent less. “This type of widespread cutback in consumer spending,” said Greg McBride, senior financial analyst of Bankrate, “if sustained for any length of time, is how recessions are born.”

Other statistics reported in the survey do not help to brighten America’s economic future. For example, more people 30 and above reported a net worth lower than the same time in the previous year. Coupled with statistics from the Department of Labor which showed that there was no new job growth in August, it is easy to see why American consumers are doing their best to stop bleeding money.

However, not all consumers may react to employment and economic problems by cutting spending. According to Susan Hirshman, personal finances author and president of She Ltd., “Typically, a person’s reaction is very tied to their attitude toward money and investing. Those who think of money as a means to avoid poverty tend to have stronger reactions than those who view investing as a source of gain. Not surprising, women tend to fall more in the poverty camp and men in the source of gain.”

That held true in the survey’s findings: 45 percent of women reported spending less, but only 34 percent of men followed suit.

Since the survey points to a growing number of Americans worried about the state of their personal finances, now, more than ever, it is important to make sure your own finances are secure. One of the best ways to make sure that temporary financial setbacks don’t become long-term woes is to build a savings cushion as soon as possible. According to Evan Shorten, CFP and president of Los Angeles-based Paragon Financial Partners, “You need to be more focused on your own fiscal health and making sure you are creating an environment you cannot just survive in, but dominate in, regardless of a poor economic environment.

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