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Extra4/28/2009 9:00 AM ET

Study: Spending habit hard to break

Americans may be saving more, but in many cases that's because they have less to spend, research suggests. And lessons on frugality may be forgotten once the recession eases.

By Catherine Holahan
MSN Money

Think the recession has turned spendthrift Americans into a nation of penitent savers? Think again.

A new survey prepared for the National Foundation for Credit Counseling, released Tuesday, indicates many Americans are spending less only because they have less to spend, not because of a new urgency to save. And those who are cutting back don't plan to for long.

The foundation, or NFCC, also reported that:

  • Nearly a third of Americans are without savings of any kind outside retirement plans.
  • A full one-third had not saved anything in the past year for retirement either.
  • One in four had paid at least one bill late in the past year.
  • 28% of those with a mortgage said they were unaware of the terms.

Of those spending less, about 45% said they saw their newfound thrift as temporary and planned to recapture their old lifestyles once the economy improved.

"We were interested to see if this new savings religion was going to stick," NFCC spokeswoman Gail Cunningham says. "And frankly, I found it pretty interesting that, basically, it was split down the middle. Some people said, 'I have had it with this overspending, and frugality has become fun.' But almost an equal number said, 'I am going to go back to my old ways.'"

Spending less does not mean saving more

In fact, many Americans who were spending less had not willingly abandoned their old ways. Although 57% of Americans surveyed by the NFCC said they were cutting back, much of that decrease may have been because less money was coming in.

Disposable incomes have steadily dropped as the unemployment rate has skyrocketed. The latest figures from the Bureau of Economic Analysis show a 0.4% drop in disposable income in February from the previous month, accounting for inflation, and a 4.2% savings increase. That savings increase is huge considering that about four years ago, Americans were saving basically nothing.

But a lag in reporting may mean the government is understating the income drop and overestimating the resulting savings rate. Madeline Schnapp, the director of macroeconomic research at TrimTabs Investment Research, says nationwide income has dropped between 3% and 4% compared with this time last year. As a result, the personal savings rate is basically flat, and that's largely only because of tax refund checks, she says.

"We view consumer balance sheets to be in much worse shape than traditional government resources," Schnapp says.

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Problems coming home to roost

Ignorance: One reason consumer balance sheets are in such a mess is because Americans simply don't pay much attention to them, Cunningham says. Only about 42% of those surveyed said they pay close attention to where their money goes.

Homeowners hadn't paid much attention to the fine print, which had surprised more than a quarter of them with unexpected interest rates, payments for private mortgage insurance or other mortgage terms.

When the NFCC asked people to rate their knowledge of personal finance, 41% admitted that it was no better than average. Yet few said they had done much to enhance their understanding of how to manage their money.

"People were blind to the most basic investment schemes," Schnapp says.

Continued: Bad debts and early credit

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