Saving and spending are big issues for us at MinnEcon. The responses we’ve received from MPR’s Public Insight Network have been consistent for months: People reluctant to spend on big ticket items, channeling spare cash into paying down debt.
The lingering question: How long will it last? Will Minnesotans and other Americans who leveraged up during the early part of the decade and paid for it in the past year return to their old ways as the economy recovers? Polls, data and anecdotal evidence continue to suggest no.
“Consumers have indeed learned from their mistakes and have already adopted significant financial behavioral changes,” a new survey by insurance giant MetLife finds.
Click on the graphic and you’ll see data from the Federal Reserve Bank of St. Louis showing a dramatic drop in household debt relative to income in this recession. It’s revealing that in the tech-bust downturn at the start of the decade, debt continued to rise. Not so, now.
Of course, lots of people haven’t learned. One in five surveyed by MetLife said they are more disciplined and conservative in their finances. You could put an “only” in front of that and wonder if anything’s really changed.
But 20 percent seems like a big shift. People who are taking action are building up rainy day funds and cutting debt, MetLife finds.
We caught up with some of our Network sources who shared their personal economic forecasts in October last year and asked how things were going now.
Abigail Karels, a Network source from Minneapolis, told us cable TV and lunches out were among the spending she gave up in the past year and doesn’t miss. Looking forward, she plans to continue saving for a new car and putting money away for retirement.
Ellie Graves of Minneapolis told us last October she was focused on paying down debt. This month she said she’s held true to that.
I vowed to pay off a lot of debt and I’ve been very steady at paying things off. Because stores are holding such great sales, I’ve spent some as well, but I’ve reduced my overall debt by 70% and really plan to pay off my credit cards and remain debt free.
Nicolas Bosquez of Champlin told us last October he was still spending. “We are currently updating our home and we really haven’t changed our lives in any way and don’t plan to.”
He told us recently he’s succeeding at the rarest of feats in this recession — saving and spending. “Even while buying items to update our home we have been able to pay off a large portion of our debt,” he said. “Our savings is growing even though we are spending more money …”
Are you trying to live differently in this economy? Are you changing your spending and saving? Got any tips? Drop me a line or post below.
Check out the map below to read what others in our network are saying about spending and saving, then share your own story.