With 2012 still in its infancy, it seems consumers still have that New Year vibe and are pushing to be more frugal with their finances.
A new survey by the Resolution Foundation has revealed that one in three adults are planning to spend less in 2012 – that’s an increase compared to October, when only 19 per cent said they had plans to cut back. Part of the decision seems to have been prompted by worsening economic conditions with around a quarter of those surveyed suggesting their finances are likely to get worse this year – although a similar proportion of people currently in work are hopeful their pay will be increased.
After unemployment in the UK rose to its highest levels in 16 years, it appears that consumer confidence is falling. Even following heavy discounting in major stores over the Christmas period, retail sales still slumped by 0.6 per cent during December.
At the same time that more people are planning on spending less, it appears that we’re also thinking about saving more. According to the Resolution Foundation, monthly savings leapt to 30 per cent from 22 per cent in October – and one in five have stated that they cannot afford a holiday this year. Gavin Kelly, the chief executive of the Resolution Foundation, believes that the situation may only worsen with a new round of cuts to tax credits in April likely to have a further impact on spending power.
Of course the lack of spending has a direct effect on the economy – the less we spend, the slower the economic recovery is likely to be.
More for your money
If you’re planning to tighten your purse strings throughout 2012 then it’s vital to make your money go as far as possible on all of your essential purchases. For example, you could consider buying some food items in bulk (as long as you’re sure you’ll use them before their expiry dates); you could also carry out price comparisons online; and you can use voucher codes to save money on select items. The key to using voucher codes is to apply them to purchases you were going to make anyway as using voucher codes on items you previously had no plans to buy is a false economy – you’re being lured in to unnecessary purchases by what appears to be a good deal. However, if every time you need to buy an item – whether it’s an electrical good; a DVD; clothing; food or more – you check for voucher codes first, then you can make them work for you.