Many other homeowners say they’re spending less. Thirty percent of homeowners say in the past year they’ve paid down debt and 25 percent say they’ve learned how to better manage their budget on their own. Compared to a year ago, homeowners are spending even less, with at least 50 percent reducing what they spend on entertainment and vacations, 50 percent looking for the lowest prices and about two in five homeowners (37 percent) purchasing only what they need.
“Homeowners are worried about their jobs and debt is still historically high, however many people may not be making the necessary changes to improve their finances,” says Jamie Moldafsky, of the Wells Fargo Home Equity Group and a lead for the company’s Smarter Credit™ initiative, an effort to educate consumers on the use of credit. “It’s encouraging to know there are many homeowners trying to manage the factors they can control – like spending, budgeting and handling their personal debt – especially when they’re unsure about the economy.”
Younger homeowners, ages 18 to 41, seem to be more unclear as to what to do than older homeowners, ages 42 and older. For those who say they haven’t made any major changes in their financial behavior, 60 percent of respondents ages 18 to 41 say something else is holding them back compared to 27 percent of those who are 42 and older. Nearly one quarter of younger homeowners (24 percent) say it seems pointless given their financial situation while another 22 percent seem to be procrastinating, saying they “plan to but haven’t started yet.” The rest either don’t know how or what to do (10 percent), don’t have the time (6 percent) or don’t want to even though they should (2 percent).
The survey also shows that younger homeowners are not as educated as they would like to be about how to effectively establish and use credit. Thirty-five percent of homeowners ages 18 to 29 and 19 percent of those ages 30 to 41 say they have not recently sought information on how to get and improve their credit but wanted to do so; this is compared to just 11 percent of homeowners ages 42 to 60 and only 3 percent of those ages 61 and over.
“The silver lining of this economy seems to be the changes to more financial healthy behavior,” says Moldafsky. “When homeowners were asked if they plan to make specific changes in their spending short-term, while the economy is in a recession, or long-term changes after the economy has recovered, 77 percent of homeowners who are purchasing only what they need plan make it a long-term behavior. A large majority of those who are price shopping, teaching children about managing finances and budgeting consider these to be long-term changes in their lives.”
