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Study: Consumers spending more, despite their thinking otherwise

Posted On Tue, August 6, 2013

More than ever, consumers are focused on finding the best possible deal before purchasing something. However, according to a recent study, people are actually spending more of their earnings than they have in the past - and in almost every product category.

According to the report, which was conducted by media intelligence firm Mintel, consumer spending has risen in 13 different categories, including transportation, dining out, in-home alcoholic beverages, home and garden and in-home food this year when contrasted with numbers from 2012. Travel expenses have increased sharply, up 7 percent on a year-over-year basis.

However, when consumers were asked about their spending behavior, the only categories they believed they were spending more in were in-home food - such as groceries or take-out meals - and household care.

Fiona O'Donnell, analyst for lifestyles and leisure at Mintel, indicated that what's particularly noteworthy about these findings is that Americans say they are focused on getting the best deals, such as by clipping coupons and acting on discounts.

"Consumers have been conditioned by a nearly never-ending cycle of sales, coupon offers, members-only discounts, lower-priced product alternatives, etc., to avoid ever paying full price," said O'Donnell.

She added that what's helped individuals find the best deals are the technological advancements that today are commonplace, such as price comparison websites that enable people to compare auto insurance quotes or what the price is of a product or service at one company versus another.

Susan Menke, category manager for financial services at Mintel, indicated that what's getting in between the perception and reality of consumers saving can't be boiled down to one single thing. Rather, it's a combination of factors, such as stagnant wages, rising home prices, limited retirement savings and an ever-increasing surge in healthcare costs.

"Consumers are experiencing a number of conflicting financial goals which is impeding their ability to save more, even though they want to," said Menke.

Recommendations for how to save on health insurance
Healthcare is perhaps one of the most significant factors affecting Americans' finances. According to the Centers for Medicare and Medicaid Services, in 2010 health expenditures totaled approximately $2.6 trillion - 10 times the total in 1980, which was $256 billion.

There are a variety of ways in which consumers can secure an affordable health plan, avoiding having to pay unaffordable health insurance rates. One of the best ways of doing this is to compare and contrast health policies. However, there's more to shopping for a health plan than purchasing the one that has the lowest annual premiums. For example, as noted by Parenting Magazine, try to determine how often one visits the doctor each year. Additionally, determine how many prescriptions are purchased each year - if any - as well as how frequently the dentist and eye doctor is seen. Then, compare what the minimums are for each plan to see which one has the best deal.

Another way to save is to see if one's pharmacy has a health saver list. Many pharmacies today's have special lists where they provide affordably priced generic medications. This enables people to pay for their prescriptions out of pocket without having to go through insurance.

Another way to save is contingent on what individuals make each year in salary. Many pharmaceutical companies have programs where people who make less than a certain amount of money each year can receive financial assistance to help pay for their costs. However, the eligibility standards aren't uniform. Policyholders may want to speak with their insurer about these programs and how they can learn more about them.

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