Americans Continue to Reduce Spending in Q1
Americans continued to tighten their spending through the first quarter this year, according to Mint.com, an online personal finance service.
MOUNTAIN VIEW, Calif. – Americans continued to tighten their spending through the first quarter this year, according to Mint.com, an online personal finance service.
Data shows Mint.com users cut spending by an average of 4 percent each quarter in 2008, and by another 4 percent in Q1 2009. Overall Q1 2009 spending was down 17 percent versus Q1 2008 across eight key categories. This indicates the public remains concerned about the length and depth of the recession and its potential impact on job loss and economic security.
“This continuing trend of regular expense reductions tells me that consumer confidence is not yet on the rise,” said Aaron Patzer, CEO and founder of Mint.com. “Our users are looking for more concrete evidence that the U.S. economy is truly bottoming out before they’ll be returning to prior spending levels – if in fact they do.”
The data indicates Americans have decreased spending in shopping, entertainment, gifts and donations and transportation.
The most dramatic decrease is in shopping, where user spending has dropped by more than 40 percent, which is significant savings in aggregate, but was accomplished by a steady, gradual 3 to 5 percent cut each month in a discretionary category where that type of control is possible.
Users have also cut spending quarter over quarter in entertainment (24 percent) and bills & utilities (by 16 percent). Other categories have fluctuated quarter-over-quarter based on seasonal shifts, but still show a net decline: Spending on “gifts and donations” was down 1 percent, in spite of a 25 percent spike in Q3 and Q4 with election donations and the holiday season.
Automotive spending has seen the broadest swing in spending, with the extreme variance in gas prices in the same time period, but still nets at a 24 percent decline over the examined quarters.
The only category that has completely recovered is “food & dining”, where spending in Q1 2009 was actually higher than it was a year prior – but just by 2 percent.
“This data suggests that Mint’s current tools and guidance are working well for our users today,” said Patzer, “But there’s much more opportunity to make budgeting and planning easier and more effective for more Americans. We’ll be introducing new and improved product features and educational content in Q3 and Q4 designed to do just that.”
These indices and statistics are compiled from anonymous transactional data tracked by Mint.com’s personal finance service, used by over 1 million Americans to manage and save money. Since its launch in September 2007, Mint.com has tracked over $175 billion in transactions across users’ checking, saving, credit card accounts, and over $47 billion in assets across users’ investment accounts. Using its patent-pending Ways to Save feature, Mint.com has identified more that $300 million in potential money-saving ideas for its users.
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