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Synovate survey finds majority of Americans' attitudes on money and finance have drastically changed

3 November 2009

CHICAGO — Global market research firm Synovate today released data from its recent global money and finance survey, revealing that more than half all respondents across 16 markets have permanently changed their attitudes towards saving as a result of the credit crunch, and Americans in particular are now more focused on paying down debt and controlling their finances.

Claire Peerson Braverman, Senior Vice President of Financial Services for Synovate in the US, said that Americans are more financially conscious than they have ever been before.

"All the research we have done tells us that every little bit helps in this economy and people are re-evaluating all these seemingly small decisions to make sure they get as much value out of their purchases and for their family as possible."

Synovate asked around 11,400 people from 16 markets across the world what had changed about their money management style and attitudes in the year since the global financial crisis hit.

Cash or credit?

How consumers pay for purchases has significantly altered from just one year ago. Overall, around one in four respondents globally (26%) are using more cash now as a better way to curb spending, including 21% of Americans. However, more than half (55%) of Americans are using cash less while 34% are using debit cards more, showing that it is about control and having the money before spending it, but also flexibility and convenience.

Thirty-eight percent of Americans also say they are using credit cards less now than a year ago, and checks are also on their way out with 48% now using them less.

Braverman said that Americans are moving their finances online. "Internet banking is less expensive than checks and allows for more control when paying bills. Automatic payments can be planned in advance, thereby avoiding late fees."

Other changes Americans have gone through in the past six months include: revising their budgets (17%), changing banks (6%), selling shares or taking money out of the stock market (9%), switching to safer investments (7%), and personal or partner job loss (9%). There has also been more closing of credit card accounts (15%) than opening (9%), and 13% of Americans admit to having made late payments on a credit card.

Delayed gratification

Respondents were also asked what they have postponed buying (or spent significantly less on) in the past six months. Twenty-two percent of Americans have been holding off buying a new TV, computer, or other large appliance. In addition, 16% of Americans say they have postponed, or spent less, on purchasing a car and 10% have delayed or spent less on a vacation.

Changes have been more personal, too. Globally, 6% of people say they have delayed having a baby, including 2% by Americans. Five percent of respondents globally have even postponed surgery in the past six months, including 7% of Americans.

Braverman said, "With the relatively high unemployment in the US, those Americans who have lost one or more incomes in the family are making very difficult decisions each day... which bills do, and don't, get paid. This includes non-emergency surgeries."

Consumers were also asked why they decided to postpone or spend less. Of the Americans who delayed a major purchase, changed a life decision or spent less, 45% did this because they didn't have enough money, while 11% were waiting for a bargain and another 11% thought it just seemed wrong to spend a lot at the moment. So it seems some could spend but are simply choosing not to.

In case of a windfall

In order to understand people's main financial priorities across the globe, Synovate asked respondents what they would do if $1,000 landed in their lap today. The most popular response was put it in a bank savings account (28%), followed by pay off / pay down debt (17%), spend it on necessities like food or household bills (17%) and spend it on something fun (15%).

More than one-third of Americans (35%) would use their $1,000 to pay down debt while 23% say they would put that money straight in the bank and 21% would spend it on necessities. Only 7% would blow their loot on something fun, showing that arguably the world's most influential economy is now playing safe.

"Americans are paying down debt and saving at higher rates than we have seen in a long time - since the last recession in 2001," says Braverman.

Money matters

Forty-one percent of people globally, including one in four Americans, said they were glad the world had an economic crisis as it has helped them realize their priorities. Over half of Americans (52%) have permanently changed their attitudes to the importance of saving money and 42% are looking forward to being able to spend freely again. Fifty-nine percent of Americans said they are going to do their best to not go back to the way they spent before.

Although over half (51%) of Americans agree that their trust in financial institutions has declined dramatically and 57% believe that more government regulation is needed for the financial industry, that does not mean people are going to stop investing in the future. Just about one quarter (28%) indicated that they will not make future investments in the stock market, and 22% said they will not invest in property.

The one thing most respondents agreed on: It is the responsibility of each generation to leave the country better off for the next generation (83% of Americans and 84% of people globally said this).

This In:fact survey on money and finance was conducted in August 2009, surveying more than 11,400 respondents across 16 markets – Australia, Brazil, Canada, Denmark, France, Hong Kong, India, Malaysia, New Zealand, Russia, Serbia, South Africa, Spain, Taiwan, UK and the US.