2010 Consumer Financial Goals and Intentions – How Do You Measure Up?

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Early in the year, it looks like American consumers are still licking their wounds from the Great Recession of 2008/2009 and are taking a cautious outlook for the year ahead. The latest American Express Spending & Saving Tracker, the fifth in a monthly series, reports about consumers’ views about the economy, their financial goals and intentions, and overall spending and saving trends. It found:

  • 89 percent of consumers have set a financial goal (like reduce my credit card debt by 50%)
  • 83 percent have laid out a clear savings strategy
  • On average, consumers plan to save a big chunk of their annual
    household income, 22 percent or $14,000, and over the next 30 days plans to sock away $1,200

How will they do it? While a wishful 23 percent of consumers hope to win the lottery to hit their savings goal, most consumers have more practical strategies in place, that include

  • Using their primary income (54 percent)
  • There will be some paring back on the small luxuries in life to pad savings accounts – 30 percent of the surveyed population will rein in extras such as “morning lattes and manicures.”
  • Stashing their tax refunds, with 45 percent expecting it to contribute to savings. Use Turbo tax to get your biggest refund
  • Selling items on websites or classifieds (19 percent)
  • Taking of a second job (15 percent)

“This year, consumers are focused on finding the right balance between saving and spending by continuing to make smart trade-offs,” said Pamela Codispoti, American Express senior vice president and general manager, Cardmember Services. “For some people we found that means eating out less but buying quality products at the grocery store so it doesn’t feel like a sacrifice. Regardless of the trade-offs they are making, most people seem to be thinking about how they can be better stewards of their money.”

Managing and budgeting finances (51 percent) is also at the top of consumers’ lists of financial pursuits for the year ahead. Specifically, consumers will be looking to:

  • Significantly reduce or wipe out their debt (21 percent)
  • Buy only what they can afford (16 percent)
  • Stick to a monthly budget (14 percent)
  • Others will pursue financial goals of higher paying jobs (12 percent) or to buy or sell real estate (3 percent).

Even as consumers watch their wallets, 49 percent say they expect to spend more or the same in the next 30 days when compared to the last 30 day period. Consumers plan to spend in:

  • Non-discretionary areas, including: groceries (52 percent), child or elder care (50 percent), medical bill/healthcare (49 percent), auto expenses (48 percent), loans and credit card payments (44 percent), tax payments (44 percent)
  • Discretionary areas, including: entertainment (47 percent), dining out (45 percent), and education (43 percent)

And If Money Were No Object…We’d Travel!

Travel tops the list of pursuits consumers rank most valuable to their livelihood and well-being with 72 percent, ahead of home entertaining with friends or family (66 percent), and dining out (60 percent). Therefore, even in the midst of their pledges to become fiscally fit, a number of consumers will continue to travel rather than eliminate it from their budget.

The American Express Spending & Saving Tracker research was completed online among a random sample of consumers aged 18+. You can find more details on the survey and assumptions here

Related:
~ Retirement 401k and IRA Accounts – Have You Rebalanced and Reallocated based on Changing Market Conditions and Contribution Limits?
~ I Want My Bailout Too and Here’s Why
~ New 2010 Stimulus
Package Tax Breaks

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