Given rising interest rates and inflation, it’s no secret that Americans are feeling the crunch. According to the new Country Financial Security Index Report, conducted by Ipsos, only 53% of those polled feel financially secure in the third quarter of 2022. That figure compares poorly to 56% of respondents saying as much in the first quarter of 2022, and 61% in the first quarter of 2021.
“Financial security sentiment is on similar lines as expressed early pandemic in 2020,” per the report, when just 53% to 55% of people felt financially secure. Eight in ten Americans (82%, specifically) say the U.S. economy could be heading for a recession.
On the upside, however, 68% of baby boomers say they are financially prepared, along with 52% of Gen X and millennial respondents.
This positive mindset could be contributing to Americans sticking by their current spending and saving habits. For instance, 32% of Americans polled — across age groups — said they will not stop setting aside emergency savings funds, while 28% said they won’t stop saving for retirement.
In addition to keeping up with their savings habits, perhaps established during the pandemic when people weren’t spending money on dining out, travel, or entertainment outside the home, Americans also show reluctance to change their spending habits.
The study showed that 56% of Americans were not willing to make a “lifestyle sacrifice in the event of a recession.” These include spending items like travel, dining, pampering, clothing or accessories, gym memberships, streaming subscriptions and outside-the-home entertainment.
Specifically, what do Americans refuse to give up?
Streaming services top the list, with 27% of those surveyed across age groups saying this primary form of entertainment during the pandemic is here to stay. One-quarter of Americans surveyed refuse to give up dining out, in spite of hidden charges and rising restaurant prices. People will continue to travel, as well, with 19% saying they will continue traveling for leisure by car and 16% saying they will travel for leisure by airplane.
Another 13% won’t give up outside-the-home entertainment, such as sporting events, concerts, or theater tickets. Finally, 12% will continue getting their hair and nails done, going for massages, and other “pampering” activities.
This consumer confidence seems to bode well for the economy as people haven’t yet shifted their spending habits substantially for fear of a recession.
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