Job insecurities, rising food costs, fluctuating gas prices and market volatility are only a few ramifications of the Great Recession. However, many consumers believe that those scenarios are here to stay, and have since changed their money management habits to accommodate the new economic reality.
According to the Country Financial Security Index study, 27 percent of respondents said the pre-recession economy would never return, and more than half of study participants said the booming economy that prevailed in the years leading up to the collapse may not be seen again until 2015 or later. In response to this realization, many people have said they lack confidence in their ability to improve their financial condition. For example, 63 percent said they are at least somewhat confident they can meet their financial goals, but 27 percent said they are not confident at all. Twenty-six percent noted that a higher paying job may allay their economic fears, and 25 percent said lower national debt levels may demonstrate to them that the economy is moving in the right direction.
“With the most optimistic believing a full economic recovery is years away, the need for people to take control of their money has never been greater,”says Joe Buhrmann, manager of financial security support at Country Financial. “It’s encouraging a majority are confident they can meet their financial goals. However, financial security is different for everyone. Redefine your financial security in this economy and revisit your goals. Create a plan to achieve them in this economic climate.”
Many Americans listed permanent changes they made to their finances
While many consumers have taken some temporary actions to improve their finances, other respondents listed a set of changes that they made permanent after the economy fell into recession. For example, 35 percent said they downsized or cut back on their pre-recession lifestyles, while 16 percent said they instituted a budgeting plan into their finances to help them curb spending. Eleven percent said they are more measured about credit card spending and carrying balances, and 4 percent said they rely on more conservative investments to meet their wealth-building goals. Thirty percent said they incorporated all of these measures to improve their overall finances.
Many consumers have also relied more heavily on professionals to help them develop a money management style that works for them, and financial advisers and credit counselors say they expect this trend to continue in the future as consumers focus on making better financial decisions.