While Americans are finding it harder and harder to afford big purchases such as homes and cars, a new survey of household spending and savings indicates that it's not the big-ticket items that get many consumers in trouble.
Instead, it's the little things that consumers concede they splurge on that often prevent families from reaching their savings goals. Surprisingly, the biggest culprit isn't frequent trips to the mall, according to the survey, released last week by the Pew Research Center. Many consumers say dining out at restaurants is the thing they "splurge on most."
What's more, consumers have drastically expanded the list of things they deem to be necessities of life. For instance, 68% of adults now believe that a microwave oven is an absolute necessity, up from just 32% a decade ago. Fifty-nine percent say they absolutely must have an air conditioner in their cars, up from 41% who thought so in 1996. Roughly half of all respondents say that a home computer and a cell phone are needed to function in day-to-day life.
Yet when surveyed about their own savings goals, the vast majority of Americans described themselves as thrifty. The Pew survey, based on telephone interviews conducted nationwide this fall, said 77% of adults describe themselves as "the kind of person who always looks for ways to save money." Meanwhile, 67% said they are the kind of people who are "always aware" of how much they're spending, and 88% said they closely watch how much they spend. When pressed on the issues, though, 63% of respondents conceded they "should be saving more."
This seemed to confirm the findings of a separate survey released last week by GfK Roper Consulting. That survey found that around 21% of Americans feel that their single most important financial goal this year is "just keeping up with the bills." Another 21% said their biggest task is to pay down debt. Meanwhile, other laudable goals, such as saving for retirement, putting kids through college and purchasing a home, ranked much farther down the list.
- Video: The American spending spree
From the Pew survey on Americans' spending and saving habits:
|Which kind of expense do you splurge the most on?|
Food and dining out
Entertainment and recreation
Shopping and personal items
Home and housing
Children and schooling
Bills and utilities
Note: Responses total more
than 100% because
respondents could offer
more than one answer.
Source: Pew Research Center
This article was reported and written by Paul Lim for U.S. News & World Report.