Spending habits change

The newest consumer survey from Fort Worth, Texas-based First Command suggests that one in five consumers have cut back for good on their spending.

“The ranks of Americans who contend they have permanently reduced spending is continuing to rise, pointing toward a more frugal consumer environment after the recession is over,” noted the report from First Command.

First Command’s Financial Behaviors Index assesses trends among the American public’s financial behaviors, attitudes and intentions through a monthly survey of approximately 1,000 U.S. consumers aged 25 to 70 with annual household incomes of at least $50,000. The margin of error is +/- 3.1 percent with a 95% level of confidence.

The May survey of the First Command Financial Behaviors Index reveals that 20% of Americans say they have cut back for good on spending, up six points from 14% in February.

“This steadily growing trend toward permanent belt tightening is not about getting through the current recession – it’s about the birth of a new way of life,” Scott Spiker, CEO of First Command Financial Services, noted in the report.

Other survey findings include:
• Many Americans indicate that they are experiencing sleep issues due to the economic situation, namely difficulty falling asleep (19%) and difficulty staying asleep (17%).

• Americans are reducing leisure activities (52%) and clothing purchases (49%), and are attempting to reduce their utility bills, including electric (38%), cable (30%), telephone (32%) and Internet (19%).

• Many Americans say they are shopping smarter, including shopping at discount stores (49%) and increasing their use of coupons (46%).

• “As difficult as it is to say, this recession is a walk in the park compared to the looming Medicare and Social Security deficits,” Spiker noted. “We’re not going to spend our way out of these problems. Government can’t make them go away, either. Americans must spend less and save more so we can take care of ourselves over the long term.”