As fiscal cliff looms, consumer confidence slips in December

The level of consumer confidence declined to end the year, which may be due to some consumers who are experiencing credit rating issues. Troubles with debt can force many consumers to feel less confident about the economic situation, which may hurt consumer spending, as a whole.

The Conference Board recently released its December edition of the Consumer Confidence Index, which showed a decline from the previous month's figure. Overall, December's level dropped to 65.1 from November's 71.5. Meanwhile, the report's Expectations Index, which denotes future sentiment, fell to 66.5 in December, nearly 15 points from the previous figure of 80.9. The Present Situation Index had a notable gain, as it reached nearly 63, which was close to five points higher than the previous level.

"Consumers' expectations retreated sharply in December resulting in a decline in the overall Index," Lynn Franco, director of economic indicators at The Conference Board. "The sudden turnaround in expectations was most likely caused by uncertainty surrounding the oncoming fiscal cliff. A similar decline in expectations was experienced in August of 2011 during the debt ceiling discussions. While consumers are quite negative about the short-term outlook, they are more upbeat than last month about current business and labor market conditions."

Despite the worries about the current state of the market and potential threats to recovery, many consumers felt the recent market conditions improved. The report showed that more than 17 percent of consumers felt that the economy was improving, which was nearly three percentage points better than the previous month. The level of consumers who felt the opposite about the market declined by nearly the same amount.

However, there was worry about the labor market from many consumers. The report showed that those who expected job prospects to improve dropped two percent from November to December. The level of those who thought fewer employment opportunities would be available also dropped, as it fell to 21 percent from the previous month's level of more than 27 percent.

Income expectations did not change much, as fewer than 20 percent expected the level to improve during both months. Confidence did improve for some, as the level of those who thought the situation would worsen dropped by nearly 3 percentage points.

The economic outlook in the next few months was not particularly optimistic, either. The level of consumers who though business conditions would improve in the next two quarters fell more than 3 percentage points, while those who thought it would decline rose sharply, the report added.

Many ways to improve savings in coming months
Those consumers who are worried about the continued economic issues affecting their credit rating may want to take extra precautions to ensure their personal finance situation is preserved. There are many ways to do this, and if money is managed correctly, it will help pay off bills and avoid needing a credit fix later on.

One great way to save money is for consumers to brainstorm ideas with family members. Having a lengthy discussion about what the family has too much of, or not enough, can help improve budgeting. It can also make purchasing items at the store easier, as consumers will be more reluctant to purchase items they won't need.

It is also necessary for consumers to check credit reports regularly. This is best to do on an annual basis, and will give plenty of ideas on how the personal finance situation is progressing. Keep in mind, there is always a chance that these reports contain errors, so if this is the case, be sure to contact a credit repair law firm to work the problem out. This could be cutting a large number of points off of a consumer's score, so settling these issues can better their standing substantially.

Some people may benefit from having some of their pay check each month go right into their savings accounts. There are many financial institutions that allow this, and consumers can adjust the level that enters the other account on a regular basis to get the amount saved that they are comfortable with.

Consumers also may want to plan for the future, to be in an ideal fiscal position to retire later in life, as well as in a stronger position when it comes to paying off debt.

However, it is sometimes too much for consumers to manage their debt and pay everything off in the necessary amount of time. When this happens, people may need to look for a credit fix. Contacting Lexington Law Firm to utilize their credit repair services may be a good way to ensure debt is manageable in the future.