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Survey Results Measure Consumer Reaction to Economic Instability
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Tanisha Warner (713) 394-3202 |
Release Date: August 26, 2008 |
Money Management International (MMI), the nation’s largest full service nonprofit credit and debt counseling and education firm, announced today the results of a survey designed to measure consumer sentiment towards current economic instability.
Experts contend that our economy isn’t yet in a period of recession, but for many Americans that is simply a formality. While consumers differ on how they define recession, 86 percent of survey respondents confirmed that their family is feeling the effects of an economic downturn.
Interestingly, when asked how they would have prepared for the current economic downturn if they had the benefit of hindsight, more than half of respondents said they would put more money away in savings vehicles, and indulge less in luxury items.
Families that relied on credit to make ends meet over the past year are realizing that the cost of living spike isn't a temporary hiccup. Consumers need to readjust spending habits to accommodate a true higher cost of living and ensure they aren't adding to their credit card balances month after month, just hoping things will get better soon.
Key MMI survey findings include:
• Almost half (46 percent) of respondents defined recession as “when the cost of living rises,” signaling that, regardless of typical indicators like lack of economic growth or rising unemployment, consumers respond when they’re affected personally.
• Approximately one out of five people have already resorted to paying for necessities with credit.
• 23 percent of surveyed consumers are carpooling to work and driving less, in response to rising gas prices.
• Only 24 percent of surveyed consumers said that they are coping with the economic downturn by adding money to their savings cushion.
• 41 percent of respondents would consider taking on an additional job if the economic downturn continues indefinitely—but as unemployment rates rise, that may not be an option for many families.
• More troubling, almost 25% of respondents don’t plan to change any habits if economic instability continues.
“While the housing and credit crunch have had serious ramifications for many consumers, all is not lost,” said Cate Williams, vice president of financial literacy for Money Management International. “The economy will regain its footing eventually, but consumers must be realistic and live within their financial means now. Going back to the basics of budgeting and credit use can help consumers adjust spending habits to help prevent a temporary economic hardship from having a permanent impact on their family.”
Williams continued, “It’s important to seek help from a trusted source if you feel yourself getting in over your head. Don’t wait until your home and your family’s security is on the line to ask for help.”
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Money Management International, is a non-profit community service organization that provides confidential financial guidance, counseling and debt management assistance to consumers. MMI helps consumers trim their expenses, develop a workable budget, lower their debt payments and repay debts. Services are available by phone. To visit with an MMI counselor, call toll-free 1-800-762-2271- 24 hours a day, 7 days a week. Spanish speaking counselors are available. Consumers can also learn more by visiting the MMI home page at www.moneymanagement.org.
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