Americans spurning luxuries in favor of shoveling money into savings accounts.
Americans have put themselves on a budget. They're spurning Caribbean vacations, $10 cocktails, and designer coffees in favor of shoveling more money into savings accounts. In the first quarter of 2009, the personal savings rate hit 4.2 percent, its highest level since 1998. At the same time, consumer credit card debt fell by 6.5 percent. And in a recent survey by the National Foundation for Credit Counseling, 57 percent of Americans said that they're spending less than they were a year ago.
That moderation, it turns out, could outlast the recession, and most economists and consumer experts say that's a good thing. In the NFCC survey, about half of the respondents who had reduced their spending said that they would continue to spend less even if their financial situation improved. "The consumer has fundamentally changed," says Margot Bogue, associate director of brand planning for the advertising firm Cramer-Krasselt. The new "evolved consumer," she says, shops with more discipline and focuses on buying products with lasting value rather than just accumulating stuff.