Paychecks keeping Americans afloat

03.20.09
By Timothy Jones

Over the last year consumers have faced an uptick in auto loan delinquencies, mortgage foreclosures and credit card debt. Now, some Americans reveal a struggle to avoid financial ruin - often living with just one month's salary as a cushion.

According to the 2009 MetLife Study of the American Dream, nearly half of Americans are two paychecks or less away from defaulting on financial obligations.

Trends revealed in this third annual study by the insurance and financial services company come at a time when Americans have lost substantial amounts of wealth - over $11.2 trillion in the last year, according to the Federal Reserve.

"While we find the American dream still alive in 2009, sweeping changes in the economy have led to a reevaluation of priorities for most Americans and a fundamental shift away from materialism," said Beth Hirschhorn, senior vice president of global brand and marketing services at MetLife.

"Instead of trying to keep up with the Joneses, many now seem focused on simply trying to keep up with the mortgage payment, car loan and credit card bills," added Hirschhorn.

The MetLife study says that 81 percent of consumers now view a vacation as a luxury while over 90 percent consider restaurant dining a perk - both of these figures increased significantly from 2006 when household financial situations were much different.

Frugality is the new mantra of many American families as spending habits change and saving patterns are increased.

Lifestyle changes are helping households meet new budgetary constraints. 66 percent of all consumers are eating at home more often, says the study, with 39 percent of those polled making grocery and other purchases from big box stores.

Nearly 50 percent of consumers are ditching brand name items for generic products in what may be a permanent shift in American consumerism.

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