Have Baby Boomers Permanently Changed their Spending and Saving Habits?
September 25, 2009 by MJP
Filed under Mortgages, Debt, and Credit
I received a press release today about a national survey of U.S. adults of all ages and socioeconomic backgrounds. The survey focused on how spending and saving habits have been changed by our economic turmoil and whether those changes are expected to be permanent or temporary. The results were interesting and hopeful.
< The essential findings of the survey were that 63 percent of Americans say that the way they spend and save has been permanently altered by our economic downturn. Conversely, only 29 percent said that their spending and saving would revert back to the way it was before the recession hit.
The answers to the more specific survey questions about current spending and saving habits were compelling:
- 75% of survey participants have cut back their everyday expenses.
- 62% have reduced credit card purchases.
- 57% have reduced their level of debt.
- 53% have delayed purchasing a major item such as an automobile.
- 42% are using savings or investments to pay expenses. (Ouch!)
- 34% are saving and investing more. (Yes!)
These same folks were asked similar questions about their future spending and saving plans:
- 59% will continue to reduce everyday expenses.
- 60% will continue to save and invest more.
- 61% will continue to pare back their credit card purchases.
- 63% will continue to reduce the amount of money they owe.
In the past, we baby boomers have been criticized for our spendthrift ways and making ourselves unprepared for retirement.
I hope that these survey findings apply to us. In fact, I hope that baby boomers are even more determined than ever to maintain better spending and saving habits. We don’t have as much time to recover from the economic damage. Therefore, our level of diligence should be increased to compensate.
What about you? Have your spending and saving habits permanently changed for the better?
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I saw the same survey results, but what I think is missing in the second set of questions is whether or not the person either has had their income cut, lost a job, or income levels were the same. I think the resuts tell us more if people’s income in 2009 and as they see it into the future is the same or increasing, if it is and people are working to decrease debt, increase investing etc, thats fantastic.
On the other hand, if income is going down, or people are still fearful of their job, they will of course behave one way, but that doesn’t tell us much about the “new normal”.
I hope everyone is “living within their means”, saving for retirment, paying down appropriate debt, and improving their cash managemnt, regardless of situation, but I also home those that can do that and have discretionary income, do spend it…so that we all benefit.
Just adding some thoughts to this great discussion.
I think boomers have really tightened their belts since the recession. They have been given a reality check where finances are concerned and I think they are really taking more notice how every penny is spent. I also think they are more likely to start thinking about retirement security and are begining to take planning for the future seriously.
The boomers often don’t believe there is a future,some of them think they’ll drop dead before retirement.
If we could only get this heath insurance business under control. I can’t tell you how many people I know could still retire on schedule if they would not have to pay sooo much for health insurance. Just think of the jobs that would open up then! When you have a prexisting condition forget about affording insurance.
The American people have decided that they would rather be sick than well. We should embrace this and build our economy around it instead of fighting it. Build more medical schools and hospitals. Instead of health care dominating just 26 per cent of our economy lets shoot for 40 or 50 per cent. With a medical/industrial complex like that we can attract sick people from all over the world to come to our hospitals for treatment (as now come from Canada). That would be one way to get some of those U.S. dollars that are trapped in the “global economy” back into our domestic economy where they belong.
Same with the criminal justice system. Embrace the rampant criminalty of our people and make it a mainstay our our economy. Build more prisons, train more enforcement personel.
The “economy” is what we do with our time and resources. If we are going to be a nation of sick people and crooks lets make the most of it and build our economy around it.