Fascinating Mint Stats

If you don't use Mint, the personal finance site (disclaimer: a Benchmark portfolio company), you should. It's a killer service. Mint provides a simple, powerful, web-based alternative to the bloat-ware that Quicken and Microsoft Money have become as a result of the "feature war" they commenced a decade ago. In this environment, where everybody is taking a second look at personal spending, Mint is a great tool for gaining insight into your finances and patterns of behavior.

Mint CEO Aaron Patzer wrote a guest column for TechCrunch today, providing some recession stats derived from Mint's 900,000 users. It contains some really fascinating data from real people, a counterpoint to the data we're getting about the recession from politicians, TV talking heads, and bankers.

Aaron sees the data revealing a recession that's less dramatic than the "Great Depression 2.0" news reports would have us believe (i.e., 10% spending declines across the board). But it looked pretty bad to me. A couple of grim numbers for consumer companies:

• Entertainment spending down 22%
• Home (services, furnishings, etc.) down 21%
• Travel down 24%
• Cash savings cut in half
• Debt up 10%
  

The gas/fuel decline of 32% isn't as meaningful to me, because it's likely driven more by the decline in gas prices since August than by changes in consumer behavior.

The decline in cash savings -- from roughly $11,200 to $5,500 augurs a much more troubling first half of '09. That number suggests that consumers have been deficit spending to the tune of $700 per month since the recession hit. Once that cash cushion is effectively gone, we could see the current average spending declines of $400-500 per month drop to over $1,000, or closer to 25% across the board. Since expenses like rent, utilities, and food are less susceptible to cuts, that extra $500 or so of reduced spending is going to hit discretionary categories -- entertainment, shopping, travel, dining out.