Up To 70% Of Americans Are Cutting Back On Spending, New Survey Says

November 20, 2018

You can make purchases. Beautiful young woman in casual clothes joyfully holding in her hand a lot of dollars on a gray background isolated. The concept of money and banking.

Americans are cutting back on their monthly spending, but it isn’t only because they’re looking to save more money. According to a new survey from the consumer-financial company Bankrate, up to 70% of Americans are cutting back on their monthly spending for several reasons aside from saving money.

The survey reports that 36% of Americans say they’re reducing their monthly spending to save money as their number one priority. Yet, 24% of survey respondents say they’re reducing their spending because their income hasn’t changed.

This may not be a surprise considering American middle class families are making 9% less money than they did in 1999 in nearly every state. Middle class families are those who earn an annual household income of at least two-thirds the national median.

According to the 2017 U.S. census, the most recent national household median income is $59,039.

In the Bankrate survey, about 17% of Americans said they were reducing monthly spending because they’re in too much debt. Another 11% said they were saving because they’re worried about the economy, and 5% said they were concerned about job security.

Such a high percentage of Americans saving money is a good thing in light of recent research. Up to 42% of the population has less than $10,000 saved for retirement, one-third of population has less than $5,000 and at least 21% have nothing saved. What’s more, only 39% of Americans say they have enough money saved to cover for a $1,000 emergency.

Debt is also a major issue. Credit card debt is as high $1 trillion and student loan debt is even higher at $1.5 trillion.

Because of debt and high housing prices, many millennials have taken to postponing their wedding ceremonies because they can’t afford it. Only one-third of those buying diamond jewelry said they’re willing to spend over $1,000 and flowers alone make up 7% to 8% of an average wedding budget.

The Bankrate survey also found that those who make more money, around $50,000 a year or more, were more likely to limit their spending because they were looking to save. Households earning $30,000 or less were more likely to limit their spending because of worries about the economy.

Additionally, millennials (Americans age 24 to 37) were more likely to prioritize cutting back on spending than Generation X (Americans age 38 to 57).

“Older Americans aren’t showing the same dedication,” said Bankrate. “Stagnant income was the top response for Baby Boomers and the Silent Generation.”

The survey also says you can cut back on spending by starting with a budget.

“After subtracting fixed monthly expenses [from your income],” Bankrate says, “[you’ll have] a clearer picture of how much you should be spending each month. Experts recommend taking a monthly average of variable costs to determine how much you’ll need to budget for; after, evaluate the categories and see where you can cut costs.”

You can also cut costs on utilities by reducing your electricity use, lowering your thermostat at night or when you’re away, and taking shorter showers. You can also increase energy savings by installing solar panels, which have been installed in 1.3 million areas across the U.S. thus far.

Tom Corley, the author of Rich Kids: How to Raise Our Children to Be Happy and Successful in Life recommends the 80:20 rule. “It’s a simple rule,” he says. The 80:20 rule is a budget where you live off of 80% of your paycheck and save the rest.



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