The ultimate measure of consumer confidence, particularly during unsettled times, is driven by their pocket book. What money do they have, what bills do they have, how do the two match and how do they feel about their ability to keep their equilibrium.

So, when you are thinking about the near-term prospects for the economy, run all the news you see through that filter of self-interest and well-being. You should be able to guess how consumer confidence will be trending at any single moment.

The best way to feel the squeeze is to look at just how much variable cost an average consumer has in their monthly budget. Yesterday, I shared a chart from Column Five Media that showed how the distribution of consumer spending has shifted over the past 100 years. Today, I’d like to share a chart that digs in to exactly what the consumer of today spends money on. (These Column Five folks make GREAT infographics.)

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Fixed costs are close to 70% of total expenses for the average consumer. These are expenses, like housing and transportation costs, that can’t be changed without a significant life restructuring. Truly discretionary expenses, like entertainment, gifts to charity and eating out, amount to close to 18% of total expenses.

Here’s what that means in real dollars:

  • The average consumer takes home about $4,205 each month, after taxes.
  • Housing, transportation, healthcare and insurance costs $2,820 each month.
  • Of the remaining $1,385, $616 goes to food, education and assorted items for personal care.

There’s not much margin for error. A downturn in hours, a cut in salary, a job elimination, an expected expense can put this average U.S. Consumer Unit in a bad spot.

The reality of this math puts the results from BIG Research’s continuing survey of Consumer Intentions and Actions in context. In their January briefing, the analysts at BIG Research paint a picture of a consumer who is becoming warily confident, but who does not intend to stop their new habits designed to make them more financially stable.

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From the report:

While the current double-digit U.S. unemployment rate is likely keeping consumer sentiment and spending depressed, consumers remain relatively positive about the employment outlook for the first six months of the New Year…in January, 31.0% indicated “more” layoffs over the next six months, down just over a point from last month (32.5%) and nearly half the reading from a year ago (59.9%). Close to one in two (45.8%) contend that layoffs will remain the “same,” stable from December (45.7%) and rising from January ’09 (30.5%). Nearly one in four (23.2%) are predicting layoffs to decline, up from 21.8% a month ago and more than double the figure recorded a year ago (9.6%).

Consumers also retain their optimism with their own job security this month…4.4% are currently concerned about becoming laid off, flat from last month (4.6%), but lowering by 50%+ from January ’09 (9.6%).

It looks like many consumers vowed to rein in spending and control debt in 2010…nearly two in five (37.9%) are prioritizing paying down debt over the next three months, rising from 34.4% in December. Almost as many (37.0%) contend they will decrease overall spending in Q1, up more than five points from last month (31.6%). Consumers are also increasingly focused on adding to their savings (30.0%) and paying with cash more often (25.7%).

Within the context of this wary stability, one can understand the visceral resentment of the bailout of the financial industry, the concern about home values, the despair that creeps in when the media bleakly reports the future and the desire for clear and decisive leadership from the government.

None of those external factors is going to change, so we should expect a wary consumer and a volatile body politic for a while yet.