Reducing driving and gas usage ranks as top savings strategy
PRINCETON, NJ -- Americans can be divided about evenly into two financial camps: the 51% who say they have had to significantly cut back on their spending recently, and the 49% who say they haven't.
Rising gas and grocery store prices are two obvious sources of financial strain for American households, but pressure is also coming from other directions. Credit markets are tight, more Americans are out of work than a year ago, and, according to a recent Commerce Department report, although wages are up, earnings are not keeping pace with inflation.
The effects of this squeeze are most evident among lower-income Americans. According to a recent Gallup Panel survey, not only are the vast majority of lower-income Americans having to cut back on spending, but they are largely cutting back on basics such as food and gas.
Seven in 10 Americans living in households earning less than $35,000 a year say they have had to cut back on their spending recently. Even half of those earning $35,000 to $74,999 per year are in this position. By contrast, most of those earning $75,000 or more per year have yet to feel enough of a financial pinch to force them to scale back their spending. Only 36% say they have.
With a follow-up question asking those who have cut back on their spending to name the specific things they and their families are doing without, Gallup finds Americans cutting back on a range of items.
The No. 1 savings strategy, mentioned by 36% of Americans, concerns the use of gas for driving, including driving less, buying less gas, and buying cheaper grades of gas.
The No. 2 strategy is highly related to the first: cutting back on travel and vacations. This is named by 26% of Americans, and when combined with driving and gas, suggests that more than half of Americans are focused on transportation costs as the best way to save money right now.
The next-most-commonly cited area for cost cutting is food and groceries, mentioned by 25% of Americans. Entertainment and eating out are each mentioned by about one in five Americans.
Eleven percent of Americans say they are in a no-frills spending mode right now, buying only the essentials. Six percent say they are seeking to reduce their home energy bills, while 4% each are cutting back on luxury items and clothing.
Different Perspectives on Sacrifice
Even though more than a third of upper-income Americans report having had to cut back on their spending recently, the types of sacrifices they are making may not be on par with those of lower-income Americans.
Among those earning less than $35,000 a year, the top three areas where they are spending less are driving and gas, food and groceries, and travel. Among those earning $75,000 or more per year, the top three areas of cuts are eating out, entertainment, and travel.
Results for this Gallup Panel study are based on telephone interviews with 1,008 national adults, aged 18 and older, conducted April 25-27, 2008. Gallup Panel members are recruited through random selection methods. The panel is weighted so that it is demographically representative of the U.S. adult population. For results based on this sample, one can say with 95% confidence that the maximum margin of sampling error is ±4 percentage points.
In addition to sampling error, question wording and practical difficulties in conducting surveys can introduce error or bias into the findings of public opinion polls.
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