Saving for a rainy day: 91% of US consumers claim they are budgeting the same or more than a year ago

January 18, 2016

While the US economy continues to grow stronger, with consumers beginning to work, buy and live more freely again, it seems that Americans are firmly fixed on tightening their purse strings. According to research from market intelligence agency Mintel, more than nine in 10 (91 percent) US consumers are budgeting their money the same as or more than they did in 2014.

The latest Mintel research reveals that while 46 percent of US adults are at a budgeting status quo – budgeting their money the same as last year* – a further 45 percent of consumers are budgeting more, rising to a significant 62 percent of households with two children under age 18. Meanwhile, Millennials and Hispanics are both keeping a careful eye on their expenditures, with 57 percent of these consumers agreeing they are budgeting more than a year ago*.

Overall, two in five (40 percent) Americans are classified as “heavy budget shoppers” (based on attitudes and behaviors) with single parents of kids under 18 (23 percent), those earning between $50k and $74.9k (22 percent) and females (21 percent) among the most likely to take multiple budgeting actions (eg using coupons, seeking out advertised deals in store flyers, etc).

“Deal-seeking behavior has become a basic human truth, regardless of personal or macroeconomic factors, that can cause consumers to slide along a budget shopping spectrum. By and large, Americans are holding on to their budgeting mentality post-recession, with many sharing a penchant for ‘beating the system’ – stretching their dollars in a way they deem valuable. Unfortunately for retailers looking to make a profit, consumer expectations for fair prices have not waned, and technology advancements are enabling shoppers and merchants to be smarter than ever,” said Diana Smith, Senior Research Analyst, Retail & Apparel at Mintel.

Nearly seven in 10 (69 percent) adults are budgeting more this year because of rising expenses such as food, electricity and other utilities. Other key reasons Americans are watching their spending include paying down debt (32 percent) and because someone in the household became unemployed or took a pay cut (18 percent).

To better manage finances, today’s budget loving shoppers are using a variety of tactics in their bargain-hunting pursuits, with 44 percent of US consumers who shop at major retailers often or always shopping around to different stores to ensure they get the best prices. What’s more, Mintel research indicates that pride is at the forefront of bargain shoppers’ minds, as three quarters (76 percent) of adults always, often or sometimes share their shopping conquests, indicating the sense of pride and accomplishment they get from stretching their budgets.

“Researching products online and in-store before purchasing plays a key role in the bargain hunting process, and for the extreme budget shopper, it’s safe to say that low prices usually trump convenience. It is clear that Americans will sacrifice their own time to save a buck or two,” continued Smith.

Mintel research indicates that store brand stigma is waning. Store or private label brands are no longer seen as generic and poor quality, as two in five (38 percent) Americans who shop at major retailers always or often buy store or private label brands instead of national brands. In fact, the most affluent consumers (those with $150K HHI) are also the most likely group (41 percent) to opt for store brands when compared to those with lower incomes.

While the US is a nation of budgeters, consumers still like the occasional splurge. Nearly one in five (19 percent) consumers will often or always forego their budgets to acquire highly desired items, with men age 18-34 (44 percent) and Hispanics (33 percent) particularly prone to splurging. In addition to clothing and accessories (56 percent), which are the top cited “splurges,” entertainment (26 percent), vacations (32 percent) and electronics (29 percent) are popular indulgences, even among people who are budgeting more than last year.

Despite being the most likely generation to tightly budget and seek deals, Millennials are also the most likely generation to apply a balanced approach to budgeting, as 35 percent always or often splurge on items they really want, even if they are outside their budget.

“In light of a more positive economic outlook today, indications are that when it comes to splurging, consumers will stretch their wallets a bit further to indulge in fashion, entertainment and travel. Marketers are particularly interested in drawing a share of Millennials’ wallets given their sheer size and spending power. Our data, however, indicates that Millennials are just as cautious with their funds, if not more so than adults overall, while still allowing for the infrequent splurge,” concluded Smith.

Finally, despite Americans budgeting more than ever, over the last five years US consumers have become increasingly optimistic about the state of their finances, with as many as one third (33 percent) of Americans believing their personal finances are in better shape than they were a year ago*, compared to 22 percent in 2011. Furthermore, some 42 percent of consumers believe their personal finances will improve in the next 12 months**.  

*Through September 2015

**Through September 2016


Press copies of The Budget Shopper US 2015 and interviews with Diana Smith, Senior Research Analyst, Retail & Apparel, are available on request from the press office.

Mintel News

For the latest in consumer and industry news, top trends and market perspectives, stay tuned to Mintel News featuring commentary from Mintel’s team of global category analysts.

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