Despite Less Worry Over Finances, Americans Are Saving More

Americans are saving more and spending less as a result of the Sept. 11 terrorist attacks, but most are less worried about their finances than they were a year ago, according to a consumer survey released Tuesday.

Younger and less affluent people and families were most likely to worry that they had too much debt and too little savings, the survey reported. It was commissioned by the Consumer Federation of America and Bank of America.

In light of the findings, the organizations announced the expansion of a major educational campaign to help individuals save and build wealth.

“The events of Sept. 11 have caused Americans to reassess their priorities and take steps to shore up their balance sheets,” said Lynn Reaser, chief economist for Banc of America Financial Services. “Individuals seem less willing to take financial risks and are adopting a more conservative approach to spending and living.”

Conducted in mid-February, the survey asked 1,000 adults how Sept. 11 had affected their thinking about their personal finances.

Thirty-three percent said they had more interest in personal savings and 36% said they were less interested in luxury purchases.

In a separate question, 46% said they were less willing to invest in stocks and mutual funds after the collapse of energy giant Enron Corp. The margin of error was plus or minus 3 percentage points.

Reaser said the terrorist attacks had made Americans less likely to purchase big items or make large financial commitments, a “sobering effect” contrasting speculation that Americans would want to spend more freely. But somewhat surprisingly, she said, a belief that the economy is improving had made them less worried about their financial security.

Lower tax rates, lower energy costs related to a mild winter, refinancing opportunities and rising home prices contributed to the increase in consumer confidence, Reaser said. Increased financial prudence and low levels of credit debt have also made people more confident, she said.

Reaser said she believes the trend toward increased saving will endure because a shift in values has lessened Americans’ emphasis on accumulating material goods, particularly among young people.

The survey supports forecasts of a modest economic recovery, she said.

One-third of Americans worry about their financial status, said Stephen Brobeck, executive director of the Consumer Federation, a nonprofit association of about 300 consumer advocate groups. Young adults, ages 18 to 34, were most worried about the amount of debt and the adequacy of their savings.

Brobeck announced the expansion of the America Saves program, a financial literacy campaign offering motivational workshops, hotlines, newsletters and savers clubs.

“The America Saves campaign encourages and persuades Americans to save and build wealth more effectively,” Brobeck said.

People enrolling in the program work to define and achieve savings goals. The program makes no-fee savings accounts available and will soon offer free financial consultations. More information, including a personal finance calculator, is available online at https://www.americasaves.org.