Americans Report They Would Use a Cash Windfall
A recent Scottrade survey shows people are more likely to pay down debt and
save for things like retirement, rather than spend a windfall of $5,000
Gen Y most likely to go on spending spree
ST. LOUIS.– A mere three percent of Americans would go shopping with a financial windfall, according to a recent report by Scottrade and BetterInvesting. Nearly half (48 percent) of survey respondents said they would pay off debt and another 47 percent would save it – either in a traditional savings account or in a 401(k), IRA or another retirement account.
“Even with tax returns and economic stimulus checks on their way into the pockets of the nation’s consumers, we’re seeing growing interest in first taking care of our own financial well-being,” said Chris X. Moloney, Scottrade’s chief marketing officer. “Nearly all of our survey respondents indicated they would use the money to ease their own mounting economic pressures or save it for things like retirement, meaning that those hoping the economy would soon get a shot in the arm from widespread consumer spending might be disappointed.”
He added, “The survey did not indicate what the psychological impact of rebates and the stimulus package might be, but it does say that consumers are not planning to spend the money outright.”
There is one group of consumers, however, who may be more prone to spend such a windfall. More than three times the respondents in the Gen Y category (ages 18-26) indicated they would be more likely to go on a shopping spree, compared to their counterparts in other age groups. But even still, the vast majority (9 out of 10) would use these funds to pay off debt or put it in a savings account.
“Throughout the survey, we see Gen Y thinking differently from Gen X and there’s a huge difference when you compare Gen Y’s financial views to those in the Boomer age group. In this case, Gen Y may be more apt to shop than the rest of the population, but the vast majority of Gen Y still wouldn’t spend a windfall,” said Moloney.
“We see that 83 percent of survey respondents say they are doing something to alleviate general financial concerns,” noted Bonnie Reyes, president of BetterInvesting. “And because having enough money for retirement tops their list of financial concerns, it makes sense that Americans would want to save a windfall, rather than spend it.”
“Americans clearly are focused on bettering their individual financial situations, and Scottrade is dedicated to offering easy-to-use trading tools to help people invest in their futures,” added Moloney.
About The Scottrade/BetterInvesting 2008 American Retirement Study
The 2008 American Retirement Study by Scottrade polled 1,000 Americans 18 years of age or older using Synovate’s national online research tool, eNation®, in early January 2008 to gauge Americans’ attitudes and behavioral information about retirement and retirement planning. The sample was balanced to be representative of the general population based upon region, gender, age and household income data from the U.S. Census Bureau. The margin of error was +/- 3 percent. The survey asked questions about a wide range of retirement topics, such as the respondents’ feelings toward Social Security and the amount of money people feel they need for retirement. More data from the survey will be made available in the coming weeks.
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