Despite modest gains, Americans still lack financial security
In the years following the recession, many consumers took steps to save more, spend less and pay off loans and credit card debt. However, the reverberating effects of the economic downturn are still weighing on the wallets of some households, many of which continue to face unemployment, foreclosure, negative equity and low income. While Americans have made some financial strides in recent years to get back on track, the results of a new survey reveal that consumers actually feel less financially secure this year than they did in 2011.
According to the Bankrate.com August Financial Security Index, the overall reading ticked up slightly to 99.0 from 97.9. However, readings below the 100 benchmark indicate that Americans have weaker financial security than they experienced in the previous 12 months. Analysts say that while some gains were made, consumers are overall still worse off than they were last year due to several factors.
“All five components of the Financial Security Index– job security, savings, debt, net worth and overall financial situation– rose this month, but that was not enough to tip the index back into positive territory,” said Greg McBride, CFA and Bankrate.com’s senior financial analyst.
When it came to job security, many Americans continued to experience anxiety about their positions, with high-income households – those earning $75,000 per year or more – reporting lower job security than other demographics.
Despite feeling higher levels of stress than the rest of population about employment, these high-income households reported feeling more secure in the other four financial categories of savings, debt, net worth and overall financial condition.
While the number of people saving more money for retirement increased, the change was modest. Only 18 percent of respondents said they have increased the amount they are contributing to their nest eggs, up from 15 percent last year. However, 9 percent reported they have not contributed any income toward their retirement, compared to 6 percent from 2011.