Spending, Saving Changes Should Outlast Economic Turmoil

September 25, 2009 (PLANSPONSOR.com) - Economists interested in studying the effects of the economic turmoil of 2008-2009 should have a long time to complete their efforts.

That was the bottom line of a new poll by Citi, which revealed respondents of all income levels and ethnic groups look on the spending and saving changes they have made in response to the economy as permanent .

A Citi news release said63% of Americans surveyed said they considered the lifestyle changes as lasting forever while 29% intended to go back to their historical patterns when the economy turned.

Changes made include:

  • Fifty-nine percent will continue to cut back on everyday expenses.
  • Sixty percent will continue to save and invest more.
  • Sixty-one percent will continue to cut down on credit card purchases.
  • Sixty-three percent will continue to reduce the amount of money they owe.

“This new survey points to a profound shift in the way people think about their saving and spending,” said Eric Eve, Senior Vice President, Global Community Relations, at Citi, in a news release. “The current economic environment is altering, perhaps permanently, the way we think about spending money..”

People across all income levels and ethnic groups in the survey said they have made adjustments to the way they spend and save because of the current economic situation.

According to the data, across all income levels:

  • Fifty-three percent have postponed the purchase of a major item such as an automobile.
  • Forty-two percent are taking money out of savings or investments to help pay expenses.
  • Thirty-four percent are saving and investing more.

More specifically, those who earn less than $50,000 were most likely to cut back on everyday expenses (80%), followed by 76% for those who earn $50,000 to $75,000. But even at the top of the income scale, people are making adjustments and cutting back on everyday expenses — 70% for those who earn more than $150,000 and 68% for those who earn $75,000 to $150,000.