Americans are cutting their spending and savings habits, but they are not yet resorting to additional debt to get through tough financial times. The new COUNTRY Financial survey shows most people are stopping short of tapping into credit and existing savings to make ends meet, despite the fact that nearly three in four Americans (73 percent) think their financial security will not improve this year.


"Many people are struggling with rising prices," says Keith Brannan, vice president of financial security planning at COUNTRY. "The good news is that while we are changing our habits, the majority haven't yet crossed the line into high interest credit card debt and their savings accounts."

Americans Make Cuts:

- Nearly two-thirds (65 percent) have cut back their spending and 62 percent have put less money into their savings or retirement to cope with the current economy.

- Only one-quarter (26 percent) have had to rely on credit cards to get by and less than half (43 percent) say they have tapped into their existing savings.

The Budget Struggle

The survey finds less than half (49 percent) use a household budget, despite the fact that most Americans are pessimistic about their current financial condition.

Many of those who do use a budget may still struggle with balancing finances. Budgeters are more likely to cut spending (70 percent) than those who don't budget (58 percent). They are also more likely to scale back savings and retirement contributions (63 percent) than people who don't use a budget (60 percent).

"It's surprising that many people have not started budgeting despite economic instability," says Brannan. "Taking control of the situation is crucial, and a basic system can help you track and adjust your finances. If you already use a budget, it is important to learn how to prioritize spending and saving habits most effectively for both the short and long term."

Important tips on how to prioritize spending and saving:

- The best place to start adjusting your finances is with your discretionary spending, such as eating out less, renting movies instead of going to a theater and planning vacations closer to home.

- You should also look at your fixed expenses which have some flexibility:
* In hotter months, set your thermostat two degrees higher to save on your electric bill.
* Review your cable and cell phone packages to see if you can save on monthly bills.
* Turn off your lights and install energy-friendly lighting. According to the U.S. Department of Energy, artificial light consumes almost 15 percent of a household's electricity use.

- If you need to start cutting your contributions to savings, consider starting with college savings funds. You can always borrow later to pay for your child's college. Do not cut contributions to your 401(k). Since employers often match your contributions, you could be losing free money in addition to the money you contribute on your own.