The times are not easy. Even though economists say the recession is over, many Americans are still facing the same financial problems they were experiencing last year. The unemployment rate remains high, while the number of foreclosures and bankruptcies continue to increase. In order to deal with these financial stressors, more Americans are cutting back on small expenses.
Some are making these changes in the hopes of avoiding bankruptcy or foreclosure. Still, others are cutting back in order to build up their savings and credit score following a bankruptcy.
A study conducted by Harris Interactive surveyed 3,084 adults about their spending habits. The study revealed that Americans were trying to reduce their expenses by cutting out unnecessary spending in their lives. For example, the top two ways Americans are cutting back are by switching from name-brand to generic prescriptions and medications and by packing a lunch from home rather than buying lunch each day.
Specifically, 62 percent of those polled said they opt for generic prescriptions and medications over name-brand ones. Also, 45 percent reported bringing their own lunch for work instead of going out to eat.
Many people chose to cut back on luxuries to save money. For example, 37 percent of respondents reported visiting the salon or barber less frequently, while 22 percent said they cut back or cancelled their cable television. Also, 17 percent cancelled their cell phone plans in order to save money.
While cutting back on these expenses may not seem like much, the savings enable some people to avoid bankruptcy and foreclosure. Interestingly, studies show many American consumers plan to continue their frugal ways even after the economy improves. While some are afraid they will find themselves in a similar situation again, others found they can do without the extra expenses.
Source: Credit.com “Americans cutting back on small expenses to save money, study finds,” 13 November 2010