We're planning to keep our purses snapped shut and our wallets firmly lodged in our back pockets. Mintel Comperemedia, a service that provides direct marketing competitive intelligence, predicts that in 2010, consumers will continue saving money at an elevated rate.
The recent Federal Reserve Z.1 Flow of Funds report shows Americans still saving and reducing debt at levels far exceeding recent years. The penny pinching isn't unconscious; in August 2009, nine in 10 adults (86%) told Mintel they plan to be more conservative with their money in the future. Another 75% agreed they'd be more cautious about borrowing money from now on.
"Our recent consumer surveys point to a changed mindset for consumers," states Susan Menke, behavioral economist for Mintel Comperemedia. "The recession left people feeling shaken and vulnerable, wary of previous years' spending binges and craving a more conservative approach to money. We expect that thrifty, save-for-a-rainy-day mentality to continue (in 2010)."
Susan Menke points out that this is the first major recession experienced by adults under age 45, giving them real-life experience of the anxiety produced by economic uncertainty. "The recession came as a shock to younger generations, but the positive effect is that they now feel motivated to save and invest," comments Susan Menke. When Mintel asked survey respondents about investing money, 57% of 18–24 year olds said they wanted to learn more, compared to 49% of all age groups.
Another reason Mintel Comperemedia believes frugal ways will stick-at least through 2010-is that the 24/7 news about this recession made it feel "real" to Americans of all ages. Nearly 60% of adults told Mintel that constant media coverage had contributed to their feelings of stress during the recession. In April 2009, only 17% of adults said the economic situation hadn't impacted their spending.
"Consumers' newfound financial conservatism presents many opportunities for financial services companies. As people look to save money and reduce debt next year, companies can benefit by gathering assets and building relationships with customers. Banks could also position themselves as advisors poised to help people build wealth and security in the new economy," says Susan Menke.
Data compiled by Mintel Comperemedia, December 11, 2009. Website: www.mintel.com.