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Are you spending less because of a possible recession?
- 1. Survey results: Worries about a recession • 1,072 respondents were surveyed from http://www.iwillteachyoutoberich.com about their reactions to news of a recession • I Will Teach You To Be Rich is a blog on personal finance and entrepreneurship for college students, recent college grads and everyone else – Featured in the New York Times, Wall Street Journal and more – Contact: ramit@RamitSethi.com Analysis brought to you by: www.FindABetterBank.com http://www.iwillteachyoutoberich.com ©2008 www.iwillteachyoutoberich.com All Rights Reserved.
- 2. Snapshot Who’s worried about a recession? • Women. Forty-one percent of women versus only 26% of men. • Baby boomers. Over 57% of people over 45 compared to only 24% of people under 30. Who does the worrying hurt? • Restaurants. Eighty-five percent of people worried about a recession have been eating out less. • Bars, movie theaters, etc. Three-quarters of the worriers also indicated that they’ve cut back on recreational activities. http://www.iwillteachyoutoberich.com ©2008 www.iwillteachyoutoberich.com All Rights Reserved.
- 3. Has recent news of a recession made you reduce your spending? (Gender) Percent responding “yes” “I changed my hair color back to natural to save the expense of maintaining the color.” “Been more hesitant to bring up my pending review with my boss. He keeps talking about cutting costs, Female 41% so I’ll stay quiet until things look brighter.” (n = 313) “Decided to stop buying big-ticket items and travel less for fun for a while” “We've pulled back discretionary spending to increase our savings rate. This may allow us to take advantage of value opportunities during the recession.” M ale 26% “Slowed down on excess.” (n = 759) “I've consciously looked at how I have been spending. Spending $1.69 for a bottle of water at Whole Foods is not worth it to me anymore!” 0 10 20 30 40 50 http://www.iwillteachyoutoberich.com ©2008 www.iwillteachyoutoberich.com All Rights Reserved.
- 4. Has recent news of a recession made you reduce your spending? (Age) Percent responding “yes” 70% “I have become more cognizant about moving money into stocks while good opportunities are undervalued. 60% Being in for the long haul, I can afford to take the hit 60% over the next several months until things turn around.” 57% 50% 51% 44% 40% “I'm focused on paying off bills and building up a financial cushion in 30% case of unexpected job loss, etc.” 30% 24% 24% 20% “We have slowed down tremendously because the fall of the housing market. My husband has his own business and unless it picks up we are 10% going to be in real financial trouble.” 0% 18 - 24 25 - 29 30 - 34 35 - 39 40 - 44 45 - 49 50 + (n = 293) (n = 392) (n = 150) (n = 101) (n = 65) (n = 30) (n = 40) Age http://www.iwillteachyoutoberich.com ©2008 www.iwillteachyoutoberich.com All Rights Reserved.
- 5. If so, how much have you reduced your spending by? “Saving more money now so that once we're firmly in a recession I can put into the market.” “Shopping for less expensive options for the goods and services I am use to getting: Health insurance, cell service, cable TV etc.” $100 + “I'm more frequently asking myself, quot;Do 14% I really need this?quot; before I buy “I've become more focused on paying something or make an extra car trip.” my consumer debt off completely.” “I'm trying even harder to get an $50 - $100 “Just cutting back on the spontaneous Less than $50 emergency fund together. Especially 28% going out; still keeping vacations and 58% since I should be finishing with school planned events.” soon.” “I don't go out or buy clothes as much.” Spending per week Base: Respondents who have reduced their spending (n = 326) http://www.iwillteachyoutoberich.com ©2008 www.iwillteachyoutoberich.com All Rights Reserved.
- 6. What have you reduced your spending on? Eating out 85% Recreation 76% Driv ing / Gas 36% Groceries 27% 0% 20% 40% 60% 80% 100% Base: Respondents who have reduced their spending (n = 326) http://www.iwillteachyoutoberich.com ©2008 www.iwillteachyoutoberich.com All Rights Reserved.
- 7. Analysis brought to you by FindABetterBank www.FindABetterBank.com http://www.iwillteachyoutoberich.com ©2008 www.iwillteachyoutoberich.com All Rights Reserved.