WASHINGTON (11/25/14)--More consumers say they plan to spend less money in 2014 compared with 2013, according to a survey conducted by the Credit Union National Association and the Consumer Federation of America (CFA). However, such good intentions don't always translate into thrifty actions. This is the 15th year the two organizations have conducted the annual holiday spending survey, which interviewed 1,009 adults by phone from Oct. 30 to Nov. 2.
CUNA Vice President of Economics and Statistics Mike Schenk and CFA Executive Director Stephen Brobeck held a press conference Monday morning to discuss the results. A number of media outlets were in attendance, including CNBC
, ABC Radio
, Voice of America
and American Banker
A breakdown of how consumers plan to spend this holiday, according to a CUNA-CFA survey.
"Top-line results from an economic perspective are encouraging, and holiday spending almost certainly will increase this year," said Schenk.
"However, elements of our survey underscore the fact many consumers continue to reflect significant concerns about their personal finances--most especially in the realm of weak income gains.
"Because of this we expect the increase in holiday spending this season to be modest."
Schenk said the projected increase in spending this holiday season will be approximately 3% to 3.5%, adding that the survey responses don't always correlate with an increase or decrease in spending.
"What consumers say they'll do doesn't always correspond to what they actually do. Over time, consumers generally say they'll reduce spending rather than increase spending, often by a wide margin. For most, it's almost instinctive not to plan to overindulge," he said.
"However, actual holiday spending almost never decreases. In fact, in every year of our survey, there's been only one period where holiday spending declined, that was 2008 in the teeth of the recession," he added.
According to the results, 10% of consumers said they would spend more, compared with 13% in 2013. Approximately 33% said they would spend less, compared with 32% in 2013. In 2008, 55% said they planned to spend less.
Cautious financial attitudes may have helped credit union growth over the past year. Credit union membership, which recently passed the 100 million memberships mark, grew by approximately 3% last year, compared with an approximate 1% growth in population.
The CUNA-CFA survey showed that households making less than $25,000 a year reported a lower income increase than households making more than $100,000. This chart reflects changes in household incomes overall.
"Credit union memberships are growing at a rate roughly three times the rate of population growth. The reason for that is, as not-for-profit cooperatives, we return our earnings to our members, which means essentially, credit union members get a better deal," Schenk said.
"Consumers are engaged, but they are undoubtedly, experiencing some difficulties, and part of the answer to those difficulties is shopping around for the best value proposition. More and more they're finding that value at credit unions," he added.
Brobeck agreed, saying, "It's quite clear that low- and moderate-income consumers can get a better deal at credit unions."
According to the survey results, nearly twice as many of those with low incomes (37%), than of those with high incomes (19%), said they would spend less money this year than last.