More evidence of less spending

Americans continue to decrease spending on entertainment and eating out, and will most say they will use tax refund to pay down debt or boost savings.

A recent Harris Poll of 2,355 U.S. adults found that 74% say they will spend less in the next six months at restaurants and 74% said they will spend less on entertainment. A November study found that 65% intended to decrease restaurant spending.

Other results of the Harris Poll include:
• Two-thirds of Americans (65%) say it is not likely they will take a vacation away from home lasting longer than a week. while 35% say they will vacation away from home. In November, three in ten (29%) of Americans said they would be likely to take a trip;

• Large purchases will also suffer as more than three-quarters of Americans say it is not likely they will buy a new computer (78%), move to a different residence (80%), buy or lease a new car, truck or van (89%), purchase a house or condo (90%), start a new business (90%) or buy a boat or recreational vehicle (95%). These numbers are all very similar to November so people are still not ready to spend on the big-ticket items;

• Only one in five Americans (21%) say it is likely they will have more money to spend the way they want in the next six months which is slightly down from 25% in November; and,
People are split on saving or investing as 50% say it is likely they will save or invest more money while 50% say it is not likely they will do so, almost unchanged from November when 49% said they were likely to save or invest and 51% said it was not likely.

A report from ING Direct indicates that 71% of Americans who expect to receive a tax refund will save it, invest it or pay off debt.

“ While the arrival of a refund once meant a shopping spree to many, this year Americans are skipping the spring sales to boost their savings and eliminate debt,” ING noted in its report.

More than half (51%) of Americans expecting a federal tax refund this year said they are using their federal tax refund to cover basic household expenses, including an alarming 65% who are under the age of 35.

The ING survey results include:
• Almost half (46%) of Americans between the ages of 35 to 54 who expect to receive a federal tax refund this year intend to use it to pay off debt;
• One in four Americans expecting a federal tax refund (27%) plan to save their refund and one in three (39%) will pay off debt with their refund this year;
• For Americans who owe taxes this year, 43% stated that they will dip into savings to pay Uncle Sam.