Study Finds Many Lowering Debt and
- Adjusting to the “new normal” – Forty-four percent of affluent Americans view today’s economic uncertainty as a new reality, and many are taking steps to gain greater control of their financial lives in this environment, including reining in spending and lowering debt. The survey also finds a notable shift toward less conservative investing.
- Greatest future and family concerns– While health care costs and funding retirement remain their greatest sources of concern, many families have the added challenge of financially supporting a parent or adult-age child.
A new normal
The vast majority of respondents (94 percent) who believe we are in a new normal environment also believe they are better prepared today to cope with economic uncertainty. In fact, despite ongoing uncertainty, more than half (58 percent) feel a greater sense of stability in their financial lives today than they did one year ago. However, concerns about the unemployment rate and impact of the economy on their ability to meet their financial goals remain.
As for what they can control, within affluent families one-third (33 percent) of couples have felt more in control of their financial lives during the last year, while half (50 percent) have taken steps to gain greater control, including more vigilantly sticking to a budget (32 percent), making more joint investment decisions (29 percent) and setting tangible goals for their future (28 percent). Similarly, 33 percent of respondents said they are living more within their means.
Affluent Americans’ outlook on 2013 can best be described as cautiously optimistic – with 30 percent feeling optimistic and 45 percent feeling hopeful about their financial situation during the year ahead. When asked how they anticipate their financial situation may change during 2013, 35 percent believe it will improve while 41 percent expect it to remain about the same. Additionally, men (43 percent) are more likely than women (28 percent) to believe their financial situation will improve next year, and among all age groups, those ages 18 to 34 have the most positive outlook, with nearly two-thirds (62 percent) believing that their financial situations will improve.
“At a time when stability around the world is harder to find, it is encouraging to see investor sentiment and personal outlooks improving,” says
Among respondents with a positive outlook on 2013, 45 percent cite the ability to take advantage of investment opportunities as the top reason they believe their financial situation will improve next year. Additional reasons include:
- Greater discipline in their spending habits (36 percent).
- Having less or lowered their debt (32 percent).
- Opportunities for career advancement (26 percent).
Conversely, among those who believe their financial situation will not improve in 2013, 61 percent cite the impact of ongoing market volatility on their investments as a key barrier (54 percent of men, 68 of percent women), followed by the fact that their dependents, be they children, parents or other family members, continue to be a drain on their finances (23 percent).
Fewer define their investment approach as conservative