Six in 10 say they enjoy saving more than spending
PRINCETON, NJ -- A new Gallup Poll finds that about a third of Americans, 32%, say they have been spending less in recent months, and that they intend to solidify this behavior as their "new, normal" pattern in the years ahead. Twenty-seven percent say they are saving more now and intend to make this their new, normal pattern in the years ahead.
These findings help shed light on a key question relating to the long-term impact of the current recession. In the short term, consumer behavior has certainly changed, but to what degree will the spending and saving patterns of the average American be modified even after the recession is over?
It is difficult to project behavior with precision. Humans are not always able to predict accurately what they will do in the future, given the realities that many factors may change in ways not yet anticipated.
Still, the measure of consumer intentions provides a good starting point in the process of attempting to forecast consumer behavior after the current recession fades away. To that end, Gallup's April 20-21 poll included questions asking Americans to indicate how they have modified their spending and saving behaviors in recent months, and to project how likely it is that these changed behaviors will become permanent. The results show that a slight majority of Americans believe -- at least at this point -- that they will normalize new spending or saving behavior into a fixed pattern in future years.
Fifty-three percent of Americans say they have been spending less in recent months compared to what they used to. This will come as no surprise given the widely documented downturn in retail sales since the recession began, and trends evident in Gallup's Daily Consumer spending measure. Thirty percent of Americans say they have been spending about the same in recent months. A perhaps-surprising 17% report spending more now than they used to. (Gallup did not probe for reasons why Americans' spending or saving habits may have changed.)
The majority of those spending less say this will become their new, normal pattern for years to come. This yields the aforementioned 32% of all Americans for whom, at least based on current projections, spending less will become a new way of life. This is offset to a small degree by the 6% of Americans who say they have been spending more in recent months and that they will make this their new, normal pattern in the years ahead.
Overall, results are mixed when Americans are asked about their recent changes in saving. Thirty-six percent say they have been saving more in recent months. But almost as many, 32%, say they are saving less. Although there has been much speculation that Americans have become more saving-oriented, these results show that many Americans apparently have not had the luxury of being able to increase their saving rate in the current recessionary environment.
By a 3-to-1 ratio, those who are now saving more say this will become a new, normal pattern. This constitutes 27% of the total population. This in turn is counterbalanced by the much smaller 10% of Americans who say they are saving less now and that this will become a new normal.
Putting it Together
All in all, 51% of Americans project that they are going to settle into a new, normal pattern relating to either spending or saving. Within this universe, a group of significant interest is those who say they are going to be not only spending less in the years ahead but also saving more -- behaviors that would mark them as true exemplars of the "new frugality."
The current survey results suggest that this group is actually a fairly small minority, constituting just 15% of the adult population. Translated into millions of people, this is not an insignificant number -- but certainly not a dominant end result of the recession.
Another 16% of Americans say spending less will settle in as their new, normal behavior -- but they do not think they will at the same time manage to save more. Eleven percent say they will be saving more -- but not managing to spend less.
Are You the Spending or the Saving Kind?
From time to time in recent years, Gallup has asked Americans whether they are the type of person who more enjoys spending or more enjoys saving.
The results prior to this year have been fairly consistent, with a slight edge in the direction of those who say they enjoy saving money more.
This year, the "saving money" edge has increased, so that there is now a 22-point gap between those who say they enjoy saving money more (59%) and those who say they enjoy spending money more (37%).
This question focuses on a mindset rather than self-reports of behavior. As the question reviewed above indicates, a majority of Americans overall say they have been spending less in recent months. Together, these data would suggest that people may be not only behaving in this fashion, but adopting a new, frugal mindset or mental orientation toward money.
There is little relationship between an individual's annual income and his or her responses to this question. Those with high incomes appear to be only slightly more likely to be the types of people who enjoy spending, compared to those with low incomes.
The fact that about a third of Americans say they intend to continue spending less in the years ahead is presumably not good news to the nation's retailers -- although it may play more positively in the minds of commentators who argue that America has become too consumerist in its cultural ethos.
It is important to note the obvious in regard to these projective sentiments -- that, as has been said, while intentions are nice, actual behavior is what counts. Americans' plans to cut back on spending as a "new, normal" part of their lifestyles may well change once the economy gets back on its feet and things overall appear more financially rosy. Additionally, it is worth re-emphasizing that these findings do not project to an overwhelmingly or totally pervasive consumer upheaval. The "spending less as a new, normal pattern" viewpoint is held by much less than a majority of Americans, and this group is at least slightly countered by the 6% who say they will spend more in the years ahead.
Still, the fact that almost 6 out of 10 Americans say they are the types of people who enjoy saving more than spending should give pause for thought. This finding suggests that the "new frugality" that has been so talked about may indeed have a chance of settling in as a new cultural norm. If so, then retailers may need to plan on more measured consumer expenditures as they project years into the future.
Results are based on telephone interviews with 1,051 national adults, aged 18 and older, conducted April 20-21, 2009. For results based on the total sample of national adults, one can say with 95% confidence that the maximum margin of sampling error is ±3 percentage points.
Interviews are conducted with respondents on land-line telephones (for respondents with a land-line telephone) and cellular phones (for respondents who are cell-phone only).
In addition to sampling error, question wording and practical difficulties in conducting surveys can introduce error or bias into the findings of public opinion polls.