January 12, 2017
Financial Stress Rings in the New Year
Having dug ourselves out of the worst financial crisis since the Depression, the nation entered 2017 amid rising wages and record-low unemployment. Yet three out of four adults report being “financially stressed.”
And no wonder: half of the 2,000 adults in the December survey by the National Endowment for Financial Education (NEFE) said they are living paycheck to paycheck.
The primary sources of financial stress identified in the NEFE survey were not enough savings and too much debt. This was consistent with a second finding in which respondents said that solving these issues would also provide the most “financial relief.” Here are the other findings:
- A higher income provides little protection. While 85 percent of adults earning under $50,000 per year report being stressed, the percentages don’t improve much for people earning $50,000 to $74,900 (80 percent are stressed) and $75,000 to $99,999 (79 percent).
- In every single income bracket, saving is a problem for more than half of adults – even those earning more than $100,000.
- The bulk of their major “setbacks” in 2016 involved routine expenses: car repairs and other transportation issues, home maintenance and repairs, and medical care.
Here’s more detail from the adults who report living paycheck to paycheck:
- More women are in this situation: while 45 percent of men live this way, 51 percent of women do.
- Credit cards are blamed for being the primary reason that 24 percent are living paycheck to paycheck. The other big reasons are “employment struggles” (22 percent),” paying the rent or mortgage (18 percent), and health care costs (10 percent).
Only 15 percent of Americans rate the quality of their financial lives as “better than expected.” The question for most everyone then is: will they be better off at the end of 2017?
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