Survey: Consumers spend 40% of gas savings on necessities

by The City Wire staff ([email protected]) 219 views 

Consumers likely spent 40% of savings from lower gasoline prices on necessities such as groceries and rent, according to a new research from, a publisher, aggregator and distributor of personal finance content on the Internet.

Necessities were the leading answer among all age, education and income groups.

U.S. pump prices have fallen for a year or longer. And, in spite of recent increases to a U.S. average of $2.70, consumers are still paying a dollar less than a year ago, according to the U.S. Department of Energy.

“In a testament to tight household budgets, more Americans spent the savings from lower gasoline prices on necessities than anything else,” Greg McBride, chief financial analyst for, said in the report.

The number of Americans spending any savings realized from lower gasoline prices rather than splurging on discretionary spending is no surprise to University of Arkansas economist Kathy Deck, director of the Center for Business and Economic Research.

“It’s not terribly surprising,” Deck said. “That 60 percent did not spend their savings on necessities is more surprising.”

That could be a signal that many Americans are paying down credit card debt or some other debt or saving more, she said.

The survey found that 23% of Americans saved (19%) or invested (4%) the extra savings. Millennials were more likely to have saved (26%) or invested (6%) the money than any other age group.

One thing seems to be that the savings is not flowing into the retail sales sector, Deck said.

“Retail sales growth is quite soft,” she added. “It’s surprising (the gasoline savings) hasn’t flowed into retail sales.”

Deck has said Arkansas’ improving employment and income situation, along with lower gasoline prices at the pump have given consumers a boost in perceived current conditions and near-term expectations. A semi-annual survey by Arvest Bank in March reflected Deck’s assertion, showing less total dollar spending on gasoline, while deposits in consumers’ checking and savings accounts generally have risen

Just 14% of respondents in the Bankrate survey reported spending their gas savings on dining out or a vacation. Millennials (young adults ages 20-30) were most likely to have spent on non-essential items while senior citizens were the least likely.

Not much of a surprise to Deck. noting the purchasing power of millennials lis a topic of much discussion among economists.

Millennials are the most indebted age group, Deck said.

“I wouldn’t read too much into that,” she added.

Other findings in the report, released Monday, show:
• 27% of Americans feel less comfortable  with their savings while 22% fell more comfortable with savings;
• 11% of Americans feel less secure in their jobs than a year ago;
• Americans reporting higher net worth than one year ago outnumber those reporting lower net worth by more than 2 to 1 (29% to 14%); and
• 16% of Americans say their overall financial situation has deteriorated over the past year. This is just half of what was seen  when the poll began in 2010 and down drastically from a high of 35% recorded in 2011.

There were also demographic differences in how gas savings were spent.
• Half of women surveyed said they used money saved from low gas prices to pay for necessities, compared with 31% of men.

• The higher the income, the more likely it was that the money went to savings. People who earned the highest incomes were twice as likely as those who earned the lowest incomes to say they saved the money.

• Among parents, 49% said they spent it on necessities, compared with 37% of non-parents.

• Democrats were almost twice as likely as Republicans to spend their extra dollars on meals out or taking a vacation.

• The survey was conducted by Princeton Survey Research Associates International in telephone interviews with a national representative sample of 1,000 adults living in the continental U.S.

The savings could continue throughout the summer as some experts predict pump prices will remain low through the summer months. In Arkansas, motorists are paying an average of $2.44 per gallon, according to the AAA’s daily fuel guage.  Prices range from a low of $2.35 in Northwest Arkansas metropolitan area to a high o $2.49 around Texarkana and the state line. In Fort Smith, motorists are paying about $2.44 a gallon on average.