The Third Quarter of 2010 Citi California Pulse™ Survey shows the majority of
Californians continue to cut spending, indicating a permanent behavioral shift.
The survey shows strong majorities cutting back on vacations and travel, restaurants,
clothes, and movies. Only 7 percent of Californians say they will spend more this
holiday season than last

A majority of Californians (60 percent) say the way they spend and save has forever
changed in the wake of the economic downturn, according to the latest Citi California
Pulse™. As a result of the adjustments, nearly three quarters (74 percent) say they
feel in better control of their finances and more responsible in their borrowing and
saving.

Citibank's quarterly survey found that across the board, residents of California are
making significant adjustments to their spending and saving, including cutting down
on credit card purchases (63 percent), reducing the amount of money they owe (55 percent),
 and postponing a major purchase (54 percent). In addition, strong majorities report
pulling back on an array of discretionary spending, including:

• Going to restaurants (71 percent)
• Spending on clothes (69 percent)
• Vacations and travel (64 percent)
• Buying brand name items (62 percent)
• Going to the movies (60 percent)
• Spending for special days, such as birthdays (59 percent)
• Home improvements (58 percent)

"For more than a year, our survey has consistently shown that Californians are
changing their approach to spending and saving," said Rebecca Macieira-Kaufmann,
President of Citibank California. "They are taking more control over their finances,
carefully making decisions about how they spend their money, and thinking more about
their financial future."

The changes cut across income levels, as respondents with incomes of more than
$100,000 a year are just as likely to report behavioral adjustments as those
earning less. Among those making more than $100,000, 62 percent say they have
reduced debt, compared to 55 percent overall; 49 percent report saving and investing
more, compared to 34 percent overall; and 47 percent have postponed a major purchase,
compared to 54 percent of all respondents.

The behavioral changes also appear to be influencing Californians' outlook and level
of optimism. According to the survey, 69 percent say that as a result of their
financial adjustments, they feel "optimistic and hopeful"; 72 percent say the changes
have allowed them to "simplify" their lives and "pay more attention to the things
that really matter."

Among the survey's key findings
• 91 percent say the economy in California is only fair or poor
• 87 percent rate job opportunities in California as only fair or poor
• 62 percent say their efforts to take a more active role in managing their
 finances is permanent
• 58 percent those aged 35-54 are somewhat or very concerned about their  
 current level of savings for retirement
• 42 percent say their personal financial situation is about the same as a  
 year ago, 38 percent say it is worse, and 20 percent say it is better

Regional Results
The survey again found differences among residents of Southern California and Northern
California. When asked about living in California, 73 percent in the San Francisco area
rate the state as an excellent or good place to live, while 27 percent call it only fair
or poor. This compares to the Los Angeles area, where 59 percent say California is an
excellent or good place to live and 40 percent rate it as only fair or poor. In addition:

• 58 percent in the Los Angeles area say they should be doing more to get their
 financial life in order, compared to 46 percent in the San Francisco area
• 41 percent in the Los Angeles area report working longer hours to make ends meet,
 compared to 33 percent in the San Francisco area
• 14 percent in the San Francisco area say they are better off financially than a
 year ago and 40 percent say they are worse off. In the Los Angeles area, 19
 percent say they are better off financially than a year ago and 34 percent say
 they are worse off

Holiday Spending and Travel Continues to Idle
Continuing a trend that the Citi California Pulse identified in 2009, few Californians
plan to spend or travel more this year for the holidays. The majority of respondents
plan to spend the same (45 percent) or less (47 percent) than last year, and only 7
percent say they plan to spend more. When asked about travel during the holidays, only
4 percent indicate they plan to travel more this year, with 30 percent planning less
travel, and 43 percent traveling about the same. The majority say they will stay near
home (65 percent), 17 percent will travel within California, and 17 percent will leave
the state.

Optimism Index
Overall, the Citi California Pulse Index of optimism improved from -3 in the second
quarter to 0 in the third quarter, for the first time moving out of negative territory.
While most Californians continue to rate current economic conditions negatively, the
most recent survey saw improvements in current and future outlook for debt and savings,
which helped drive the index's rise. The index's improvement correlates with the
survey's findings on saving and spending behaviors. At 0, the index is on the exact
middle point of all possible scores, which could range from +100 to -100.