When gas prices drop, do you spend more on non-necessary items like a trip to the movies or a new pair of shoes? I know that I don’t, and a Bankrate.com survey reveals that I’m in the majority. As gas prices have dropped this year, 80 percent of Americans haven’t increased their discretionary spending. Instead, the majority of us have been holding on to our extra pennies.
When gas prices rise, though, more than half of Americans reduce their discretionary spending. This makes sense, especially for families that are already working with a tight budget. Fuel is a necessity and trips to the movies aren’t. Ultimately, Bankrate.com determined that higher gas prices hurt the economy more than lower gas prices help.
Sure, lower fuel prices are helpful when it comes to planning a summer road trip, but low fuel prices alone aren’t going to dictate whether or not a family takes a vacation. On the other hand, high fuel prices can single-handedly put the brakes on a summer trip. It is easy to see how higher gas prices are more harmful based on this example alone.
The data was obtained as part of Bankrate’s monthly survey. In addition to inquiring about spending habits based on fuel prices, survey participants also answered five other questions:
- How do you feel about your job security compared to 12 months ago?
- How do you feel about the amount of money you have in savings compared to 12 months ago?
- How do you feel about the amount of debt you have compared to 12 months ago?
- Compared to 12 months ago, is your net worth higher, lower, about the same or don't know/refuse to answer?
- Compared to 12 months ago, is your overall financial situation better, worse, about the same or don’t know/refuse to answer?
It is easy to see that we have a Democrat in the White House based on the job security figures. For more information on consumers’ confidence in job security, savings, debt and their overall financial situation read Bankrate.com’s May 2013 Financial Security Index charts.
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