I surveyed the HIPsters again a couple of weeks ago to see how they are feeling about money and what the future may hold now that we are halfway through the year.
16% reported that they are less worried about money and what the future may hold now than they were in late 2008. But more than twice as many (36%) are more worried now than they were in late 2008.
In December, only a handful of HIPsters had lost their jobs. More have lost their jobs since then. Those who have been out of a job for awhile are having no luck finding work. Even those who have not lost their jobs are worried that they or their spouse might lose their jobs. Many are making less money because their incomes have been directly affected by the economic downturn.
A number of the HIPsters don't think we have seen the worst of the recession given the economic indicators. As one HIPster so eloquently put it, "It seems as though the economic indicators are not really getting better and more people I talk to seem to be out of work or still looking for work. I am also concerned that all of the borrowing the country is currently doing to facilitate its spending is going to result in tax increases that will ultimately slow any recovery."
In December 2008, 87% of the HIPsters reported that they had made changes in their spending habits as a result of the economic situation. More than two thirds of them have made even more changes to their spending habits since then.
HIPsters are cutting back even more on eating out. They are eating out even less often than they did in December and when they do eat out, they are eating out at less expensive restaurants.
More and more, HIPsters are thinking twice when they are going to make a purchase. They are asking themselves, "Do I need it or do I want it?" Many HIPsters are buying only necessities. A number of them have modified their shopping behavior to avoid temptation. As one HIPster put it, "I no longer go near a store unless something is really needed." They are putting off purchasing discretionary items like clothing and household items.
HIPsters continue to look for ways to save money on the things they need. They are using coupons more than ever, switching to cheaper alternatives, shopping at less expensive stores, and buying only when items are on sale. They are modifying their meal preparation habits so that they can cut down on food costs. Several are biking to work or taking the bus to save on transportation costs.
Many HIPsters did not take a vacation trip or even weekend trips this year. A number of cutting back on the number of activities they and their children participate in.
A handful of HIPsters have resorted to even more drastic money-saving measures. One HIPster has dropped her life insurance, changed her medical insurance coverage, bundled her internet, phone and TV, and switched to a basic TV package. Several have dropped their landline service and/or cable service.
All in all, this latest survey of the HomeTrend Influentials paints a pretty gloomy picture. Americans are being extremely cautious in their spending habits. They are cutting back on discretionary spending. They are cutting way back on impulse purchasing. They are putting off the purchase of non-essential household items.
But this doesn't necessarily mean that housewares and home goods manufacturers and retailers should just give up and write the year off.
Americans are preparing more meals at home which means that they are going to need to replace worn out cookware and kitchen tools and add new items that save them time in the kitchen. They are making improvements to their homes even if they are doing more of the projects themselves. This means that they are still going to be spending on tools, paint, flooring, window furnishings, and home furnishings. They are eagerly embracing new environmental practices and products that save them money which means that they will willingly invest in such things as steam mops, portable heaters and fans, programmable thermostats, and compact fluorescent lamps (CFLs).
