More Insights from the August BIG Call – Personal Finances and Spending Habits
Even more insights, coming your way! Let’s take a look at Americans’ financial concerns and behaviors…
Some of our more curious data this month came with our practicality measurements.
As you can see, those who said they’ve become more practical in their purchasing within the last six months – the dark blue line on the chart – decreased from 49.9% in July to a current 46.8%. With confidence dropping so sharply, one would think that consumers would become more apt to watch their spending. We saw the same movement with those focused on needs, rather than wants this month as well. 55.5% currently say they are focused on the necessities, lowering from 58.5% last month.
So it appears that consumers’ concerns – so far – stem from more macro-environmental issues, like the Debt Crisis, unemployment, et cetera. The downward view of the economy hasn’t bled into personal concerns…well, at least not any more than it has already. You can also see in the chart that, over the past year, we are still seeing a slightly upward trend in practicality and necessities. So, downward movement this month won’t be signaling any spending free-for-alls. And consumers are really remaining cautious about how they spend.
So, we know what consumers plan to do with their finances over the next three months (pay down debt, decrease spending overall, increase savings), but we asked a couple of questions in August that attempt to capture their financial mindsets.
We asked consumers if they felt that they were better off, the same, or worse off financially compared to a year ago. As you can see, consumers are far from feeling “recovered.”
Two in five feel about the “same” financially, while just a slightly lower number say they are worse off. Only one in ten says they are better off compared to a year ago.
We also asked consumers if they felt there was “too much month” at the end of their paychecks. So, in other words – is the month outlasting your take home pay?
A whopping 50% of consumers feel short on cash “all” or “most” of the time. One-third feels this way “sometimes,” while fewer than one in five say they “never” feel this way…this is by far the smallest proportion of consumers.
BIG Forward Look
So, with all this data on how consumers feel about the economy, employment, and their personal finances, it’s high time we take a look at how they plan to spend over the next 90 days, with our BIG Forward Look.
To preface this data, we ask a simple question each month…
Over the next 90 days, do you plan on spending more, the same, or less on the following items than you would normally spend at this time of year?
The results are then tabulated into our Diffusion Index (Spend More – Spend Less) and compared to previous periods of time. In the chart displayed on the screen, we are comparing August 2011 results with July as well as August results for the past two years.
Compared to a month ago, all categories – except for seasonal Lawn & Garden – are up. Declining practicality and the Back-to-School shopping season probably played a role in this. And, all categories, save for Home Improvement, have also perked up from recession addled August 2009.
So consumers are still feeling better than they were during the recession, but things are looking downcast compared to one year ago. Current economic sentiment and lack of improvement in the job market are likely to blame for that.
Finally, when we compare this month’s results to pre-recession August 2007, all categories are down. This really shouldn’t come as a surprise, though, given consumers’ economic sentiment this month. The word “recovery” just isn’t in consumers’ vocabulary just yet.
That’s all for this month! Keep watching for more blog articles on technology, the economy and of course the consumer!