Tough Economy Pushes Americans to Make Cuts

  COUNTRY Survey: People not tapping into credit despite making financial

                                  changes



    BLOOMINGTON, Ill., July 15 /EMWNews/ -- Americans are cutting their

spending and savings habits, but they are not yet resorting to additional

debt to get through tough financial times. The new COUNTRY Financial survey

shows most people are stopping short of tapping into credit and existing

savings to make ends meet, despite the fact that nearly three in four

Americans (73 percent) think their financial security will not improve this

year.



    "Many people are struggling with rising prices," says Keith Brannan,

vice president of financial security planning at COUNTRY. "The good news is

that while we are changing our habits, the majority haven't yet crossed the

line into high interest credit card debt and their savings accounts."






    Americans Make Cuts

    --  Nearly two-thirds (65 percent) have cut back their spending and 62

        percent have put less money into their savings or retirement to

        cope with the current economy.

    --  Only one-quarter (26 percent) have had to rely on credit cards to get

        by and less than half (43 percent) say they have tapped into their

        existing savings.



    The Budget Struggle



    The survey finds less than half (49 percent) use a household budget,

despite the fact that most Americans are pessimistic about their current

financial condition.



    Many of those who do use a budget may still struggle with balancing

finances. Budgeters are more likely to cut spending (70 percent) than those

who don't budget (58 percent). They are also more likely to scale back

savings and retirement contributions (63 percent) than people who don't use

a budget (60 percent).



    "It's surprising that many people have not started budgeting despite

economic instability," says Brannan. "Taking control of the situation is

crucial, and a basic system can help you track and adjust your finances. If

you already use a budget, it is important to learn how to prioritize

spending and saving habits most effectively for both the short and long

term."






    Important tips on how to prioritize spending and saving:

    --  The best place to start adjusting your finances is with your

        discretionary spending, such as eating out less, renting movies

        instead of going to a theater and planning vacations closer to home.

    --  You should also look at your fixed expenses which have some

        flexibility:

            1.  In hotter months, set your thermostat two degrees higher to

                save on your electric bill.

            2.  Review your cable and cell phone packages to see if you can

                save on monthly bills.

            3.  Turn off your lights and install energy-friendly lighting.

                According to the U.S. Department of Energy, artificial light

                consumes almost 15 percent of a household's electricity use.

    --  If you need to start cutting your contributions to savings, consider

        starting with college savings funds.  You can always borrow later to

        pay for your child's college.  Do not cut contributions to your 401(k).

        Since employers often match your contributions, you could be losing

        free money in addition to the money you contribute on your own.



    For more information on Americans' sentiments about financial security,

please visit http://www.countryfinancialsecurityindex.com.



    The COUNTRY Consumer Choices survey is based on a national telephone

survey of 3,000 Americans and is compiled by Rasmussen Reports, LLC

(http://www.rasmussenreports.com), an independent research firm. The margin

of sampling error for a survey based on this many interviews is

approximately +/- 2 percentage points with a 95 percent level of

confidence.

    About COUNTRY



    COUNTRY Financial (http://www.countryfinancial.com) serves about one

million households and businesses throughout the United States. It offers a

full range of financial products and services from auto, home and life

insurance to retirement planning services, investment management and

annuities.