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- More from Jim Kendall
A new Pew Research Center study provides useful context about how the Great Recession has altered household spending patterns.
More importantly, the study, "How the Great Recession Has Changed Life in America," provides important insights into future consumer spending plans.
Exactly what the study will tell you depends very much on who buys what you sell. The study clearly is useful for B2c businesses, but it should be equally helpful to those that sell B2b; it would be a rare business owner-manager whose daily decisions are not impacted by his, or her, family finances. You can find a good summary, and you can print out the full study, at pewsocialtrends.org.
Although the data reflect "a new frugality in - spending and borrowing habits," there are some bright spots in the study. Here are some highlights:
• 62 percent have cut back on household spending. Half say they have reduced the amount they owe on mortgages, credit cards, car loans and other borrowing.
• Looking ahead to when the economy recovers, many say they plan to keep up this new emphasis on thrift and caution as they manage their personal finances. 31 percent say they will hold down their spending, and only 12 percent say they will increase their outlays once the economy improves.
• Middle-aged adults are the most likely to say they have reduced spending: 66 percent of those ages 30-49 and 70 percent of those ages 50-64 say so.
• Among those who reduced their spending, 41 percent say they will continue with spending cutbacks.
• Among those who have lost ground during the recession, 63 percent predict it will take at least three years to recover.
• The financial turmoil has shaken Americans' confidence that they will have enough income and assets to last through their retirement. 32 percent are not confident their nest egg will carry them through retirement. Among those ages 62 and older, 35 percent say they have delayed retirement because of the recession.
• Not everyone was hurt. 21 percent of adults say their household finances are in better shape now than before the recession began. Among currently employed workers, 20 percent say they were promoted or found a better job during the recession.
• 62 percent say they expect their personal financial situation to improve in the coming year. 60 percent say they believe the damage the recession has inflicted on the U.S. economy will be temporary rather than permanent.
• Among those with annual family incomes of $75,000 or higher, 53 percent say the recession has caused only minor changes in the way they live.
• Questions, comments to Jim Kendall, JKendall@121MarketingResources.com.
© 2010 121 Marketing Resources, Inc.