American Consumer Project

More Cash for Marketers to Chase as Savings Rate Drops

But Trend Isn't Translating the Same Way in Every Community; Affluent and Poor Are Spending in Different Ways

By Published on .

Consumers are saving less again. And while that might not be great for their retirement accounts, it may be good news for marketers.

Historically, Americans save about 4% of their income, but in 2008 the recession changed behavior. Between January and May of that year, the savings rate shot to 8.3% from 3.7%. That's part of the reason recovery has been so slow to come: More savings equals less spending.

But in the past three months for which Bureau of Economic Analysis data are available, consumers are saving less again -- just 3.5% in October -- freeing up more cash for spending.

How people in our project are spending and saving
How people in our project are spending and saving

The trends aren't universal. As we look at the counties in Ad Age 's American Consumer Project -- and the consumer segments they represent -- we see different types of areas are saving and spending in different ways. To uncover those differences, Experian Simmons used our two county-classification frameworks, Patchwork Nation and Esri's Tapestry, to perform custom analysis of more than 200 data points from its semiannual SimmonsLocal study, which derives estimates from the Simmons National Consumer Study of 25,000 adults.

The implications for marketers in banking and financial services, including retailers with branded credit cards such as Target and Walmart, are obvious. "You can get a sense of what areas might be overleveraged, looking at attitudes about spending and savings," said John Fetto, senior marketing manager at Experian Simmons. But the savings rate matters to every marketer. Consider: In 2000 the saving rate was low and incomes were typically higher, adjusted for inflation. As the savings rate grew during the recession marketers were fighting for a smaller share of a smaller wallet.

Consumers who live in pre-recession boomtowns, such as those in counties like Clark County, Nev., (Patchwork Nation's Boom Town and Esri's Family Portrait) are struggling to keep up with their credit cards. They're more likely to be paying the minimum each month. Chris in North Las Vegas had problems keeping up with his debt earlier in life so now pays his full balance each month, despite using his card for "just about everything" to gain rewards and cash back.

With affluence comes both savings and credit-card use. People living in high-income counties, such as the Monied Burbs/High Society county of Howard County, Md., are more likely than average to have nearly every type of investment and credit-card option. They're uncertain about the economy as a whole but largely don't believe their personal standing has slipped in the past year. That confidence will translate into shopping for big-ticket items like new cars over the next 12 months. 

Those in poorer areas are also spending. People in the Minority/Metropolis county of East Baton Rouge, La., are more likely to say "I tend to spend money without thinking." But they're not buying luxury cars. Sandra, our participant there, carries monthly debt on her department-store cards but indulged only in a memory-foam bath mat. 

Mr. Fetto cautions against interpreting similar motivations for similar behavior in different counties. 

Take, for instance, immigrant-rich communities such as Los Angeles and evangelical ones like Grayson County, Texas (Evangelical Epicenter/American Quilt): Both are more likely than average to opt for cash instead of credit cards. Immigrants tend to shy away from banks but still spend plenty, with cash, while people living in evangelical counties are less spendy in general. American Quilt families have a median income that is less than $5,000 below the national average, and their spending is about 25% less than the typical household, according to Esri. They have a negative economic outlook for the next 12 months, which could signal that low-spending areas are going to continue to pull back.

For the next year, Ad Age is working with Esri and the Patchwork Nation to examine the impact of demographic and economic change on the American consumer. We are tracking 11 families in 11 representative counties to see how their experiences differ. For more on the families and the county segments, see

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