Consumers making 'tough choices' about spending

03.15.09
By Timothy Jones

Some consumers considered to have a 'good' credit score not long ago are now finding it more difficult to get financing for big purchases.

Others are struggling to keep their credit report clean because of late payments on credit cards and mounting personal debt.

Given these trends, consumers are "demonstrating more discipline when it comes to discretionary spending" according to a report on the Principal Financial Well-Being Index.

The quarterly survey of working Americans and retirees shows that only 10 percent of the former group and 5 percent of the latter were enticed by retailers' special discounts on products that were not necessities.

According to the survey, 73 percent of working Americans reduced their overall spending in the last two months.

"The American people get it - we're experiencing some of the worst economic conditions of our lifetime. Fear of the unknown has ushered in an era of personal responsibility and discipline," said Dan Houston, president of retirement and investor services at The Principal.

Both groups of survey respondents say that tax cuts and a rebound in the stock market would stimulate them to spend more.

More Personal Finance Articles | News Home | Discuss in our Forum

73 percent of working Americans reduced their overall spending in the last two months.