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Americans are feeling better about their finances than at any time since the Great Recession of 2007-09, but that doesn’t mean they are ready to go on a spending spree.

Despite a sharp decline in layoffs since the recession and progress paying down their debt, 41 percent of Americans told researchers in a Bankrate.com survey that their top financial priority is getting caught up on bills or staying current on living expenses. Two-thirds say they are limiting spending because they haven’t had a bump in pay or they need to save more.

The bitter experiences of the recession have left people preoccupied with the need to save rather than spend, and only 20 percent said they are more comfortable now with their level of saving than in the past.

Their mindset is in stark contrast to the “shop till you drop” days that proceeded the two painful recessions of the last decade. Those recessions taught people about their financial fragility. And the caution that’s left could continue to challenge retailers during the holiday shopping season despite University of Michigan consumer confidence numbers at an eight-year high. In other words, people might feel more confident about their jobs and the economy after surviving the recession, but that’s not the same thing as feeling sure they can withstand another brutal downturn.

“There has been a mood shift from the pessimism that existed during and after the recession,” with consumers feeling less vulnerable now after paying down debt during the last few years, said Greg McBride, analyst for Bankrate.com, a financial website that commissioned Princeton Survey Research Associates to do the national telephone survey. “They are feeling more job security, and are coming out of their shell, but they are still very risk averse,” he said.

Consumers feel compelled to save more, but haven’t had the income gains they say will allow them to do it adequately.

“They know they have woefully undersaved, and they aren’t making progress,” McBride noted. “Saving remains their weak spot.” So Americans have “very cautiously increased their spending and borrowing while their incomes haven’t increased.”

“They don’t have extra money to throw around and are a little queasy,” said McBride. He thinks that’s why the nation’s growth has been lethargic since the recession.

Millennials, the group of 18- to 29-year-olds that would typically be stoking the economy as they set up households, are the most adamant about saving. According to the Bankrate research, they have built up sizable emergency savings accounts.

Yet, millennials also are the least concerned about their wages. The most nervous group includes Americans 50 and older.

McBride said people close to retirement realize they haven’t saved enough and understand that a plunge in the stock market could slash what they have saved. Further, safe investments are paying little interest, so people, focused on catching up before retirement, aren’t getting there, McBride said. And people over 50 were among the long-term unemployed in the recession so they feel less secure about their jobs although layoffs have slowed.

Previous research by the Urban Institute showed more young people than older lost jobs in the recession, but younger workers tended to get jobs relatively quickly while those over 50 were still looking for work more than six months later. On average, the older workers took 23 percent pay cuts in new jobs.

People close to retirement are still trying to catch up, and a Gallup poll last spring showed 68 percent of 50- to 64-year-olds worried they wouldn’t have enough money for retirement. They weren’t alone in that worry. About 70 percent of people 30 to 49 years old shared the retirement concerns, as did 50 percent in the 18- to 29-year-old group.

While people worry, McBride noted, their cautious attitude is also going to hurt them in the long run.

When asked how they should invest money they won’t need for 10 years, people of all ages “showed an outsize preference for cash,” he said. Real estate investments were next and the stock market was a distant third. The strongest believers in staying safe with cash were millennials.

“This is scary,” McBride said. “Even if they save a lot more, they won’t be able to accumulate the nest egg they will need. Americans were never good savers. Now their attitude has changed, but they can’t move the needle.”

Gail MarksJarvis is a personal finance columnist for the Chicago Tribune and author of “Saving for Retirement Without Living Like a Pauper or Winning the Lottery.”gmarksjarvis@tribune.com

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