Despite a Booming Economy, Financial Security Eludes Most Americans
November 1, 2018
Unemployment is at the lowest level in decades, wages are increasing, and consumer sentiment is high, but a new study shows that many Americans are struggling to pay bills, manage debt, or accumulate savings.
The Financial Health Pulse, a survey conducted by the Center for Financial Services Innovation (CFSI), found that only 28 percent of American households would classify as financially healthy. This means that they don’t spend more than they earn, have manageable debt, and have enough savings to cover an unforeseen expense. 55 percent of the respondents were financially coping, meaning that they are doing ok in some areas of their personal finances, but struggling in others. 17 percent are considered to be financially vulnerable. They struggle with almost every aspect of their finances.
Spending was the issue that impacted most people. Nearly half of the survey’s respondents spend as much, if not more, than they earn, and 36 percent said they were unable to pay all of their bills on time. 42 percent said that at some point in the last year, they had spent more than their income and had to use credit to make ends meet.
Savings were also a pressing issue for the respondents. 45 percent said they don’t have enough saved to cover three months of expenses, and 26 percent don’t have enough to cover even a single month. 42 percent said they have no retirement savings whatsoever.
It should be noted that the study was based on a survey, and the data is based on the respondent’s memories and estimations. CSFI plans to continue the study, and in future rounds will ask respondents for permission to pull data from their bank accounts, allowing them to get a clearer picture on the realities of Americans’ financial health.