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Most consumers appear cautious about their discretionary spending this year, according to the 2001 American Express Retail Index on Everyday Spending. The survey was conducted randomly among 805 adults (all of whom have a major credit card). During the period from January 31 to February 11, 2001, the Retail Index looked at how consumers spend and manage their money, how they use the Internet, and how they prefer to pay for their purchases.

How do your attitudes and plans compare with those of the consumers who responded to the Retail Index?

Will your household expenses change in 2001?
According to findings by the Retail Index, the average American household expects fixed expenses to rise by about 13 percent this year – to an average of $23,545, up from $20,885 in 2000. This category includes rent or mortgage, groceries, utilities, telephone service, car payments, gasoline, auto insurance, doctor bills, tuition, income taxes and property taxes.

What about discretionary spending?
Overall, 53 percent of consumers surveyed said they planned to spend the same on discretionary items this year. Twenty-seven percent said they planned to spend more while 20 percent of respondents reported plans to spend less.

According to the survey, Americans will spend an average $9,312 this year on discretionary items – dining out, charitable giving, gifts, entertaining, home decorating, fast food and take-out food, health and beauty aids and cellular phone service.

Do you set up a household budget?
According to the survey, more than six in ten consumers (63 percent) set a household budget. Of those who do, more than one-third (35 percent) stick to it, while one in four (25 percent) fail to stay within the parameters they set for themselves. Thirty-six percent of consumers do not set a budget, while nearly one-fifth (17 percent) say their expenses and spending habits sometimes exceed what they can afford.

Where do you buy, and how do you pay?
The American Express Retail Index found that more consumers are turning to the Internet to save time or money when purchasing discretionary items. Overall, 75 percent of respondents said they have Internet access either at home or work (up from 68 percent in 2000), and 45 percent of these consumers also reported making an online purchase in the last six months.

The American Express survey also found that consumers cite various reasons for using charge or credit cards to pay bills. Thirty-seven percent said using plastic to pay bills gives them more time to pay; 28 percent said they prefer writing fewer checks; 26 percent said it enables them to consolidate their expenses and better manage their finances; 21 percent said they like to accrue as many points or miles for their rewards programs and 10 percent said they prefer the convenience of paying by phone or online.

March 29, 2001

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