U.S. Financial Security Outlooks Reach A New Norm
Overall sentiment stagnates, but vast differences remain between men and women
Bloomington, Ill. – June 23, 2016 – After a significant increase in positivity toward personal finances last year, sentiments have stagnated, according to the latest COUNTRY Financial Security Index®, a semiannual score measuring the overall sense of financial security in the United States.
In mid-2015, the Index score jumped 2.1 points to 66.9, the highest score reported since the financial crisis hit the U.S. in 2008. However, following the uptick, the score has moved at a fraction of that rate in the past year, settling in slightly lower at 66.7 in its latest reading.
On an individual level, many are accepting their current financial situation as a new normal. More than half of Americans – just over 51 percent – say their level of financial security is staying about the same. However, in general, men are more likely to believe their circumstances are improving than women.
“Americans seem to be settling into a new normal and accepting their less than ideal financial picture,” says Joe Buhrmann, manager of financial security at COUNTRY Financial. “Yet, as the COUNTRY Financial Security Index® score settles into its latest groove, women’s sentiments remain closer to record lows in the face of various societal issues that act as headwinds to achieving financial security.”
Financial security – Meeting short-term goals reveals gender gap
In the aftermath of The Great Recession, Americans’ financial sentiments reached an all-time low of 63.7. Since reaching the bottom of the trough, the Index score amongst men has rebounded to 68.2, past the national average and near the all-time high of 69.3 set in June 2008.
However, the Index score amongst women remains stuck closer to the all-time low at 65.1 – and more than three in four women (76 percent) don’t see things getting better. At the same time, women are more likely to feel their overall financial situation is staying the same in comparison to men.
Men are making strides to improve their financial security on a short-term basis, making it easier to see their overall level of financial security improving:
- In the past three months, men are more likely than women to have set aside money for savings and investments
- Men are also more likely to feel confident compared to women in their ability to pay debts – such as mortgages, car loans, credit cards and other debts – as they come due
“When your day-to-day finances are out of order, it’s easy to feel overwhelmed – and the lack of confidence women are feeling overall is likely due to their inability to save, invest and pay off debts,” Buhrmann says. “Taking steps to adjust your expenses and spending habits can help establish a base for meeting both short-term and long-term financial goals.”
Large money matters weigh more on women
Beyond the basic short-term financial goals such as saving, investing and paying off debts, women have a more negative outlook when it comes to meeting longer-term financial goals.
“One tricky decision in particular is the choice between setting aside money for the college education of your children versus saving money for retirement,” Buhrmann says. “All parents struggle with this decision, but for women – single moms, especially – who are less likely to set aside money at all, this decision fuels some of their biggest financial worries.”
With the cost of a college education rising and longevity extending in the U.S., women are unsure about their ability to cover the costs:
- Women are significantly less confident they will have resources to send children to college than men
- Women also feel significantly less likely they will have enough money and resources to enjoy a comfortable retirement
“In order to meet long-term financial goals, everyone needs to have a plan and actively update it as their circumstances and desires change,” Buhrmann says. “A financial advisor can help address what seem like overwhelming financial burdens to ease the anxiety many women – and Americans in general – are feeling.”
The COUNTRY Financial Security Index®
Since 2007, the COUNTRY Financial Security Index has measured Americans’ sentiments of their personal financial security. The Index also delves deeper into individual personal finance topics to better inform Americans about the issues impacting their finances. Survey data, videos and analysis are available at www.countryfinancialsecurityblog.com and on Twitter at @FinanceSecure.
The COUNTRY Financial Security Index was created by COUNTRY Financial and is compiled by GfK, an independent research firm. Surveys were conducted using GfK’s KnowledgePanel®, a national, probability-based panel designed to be representative of the general population and includes responses from approximately 1,000 U.S. adults for national surveys. The margin of sampling error for a survey based on this many interviews is approximately +/- 3 percentage points with a 95 percent level of confidence.
Figures cited from June 2008 were compiled by Rasmussen Reports, LLC, an independent research firm, based on a national telephone and online survey of at least 3,000 Americans. The margin of sampling error for the December 2008 survey was based on this many interviews was approximately +/- 2 percentage points with a 95 percent level of confidence.
About COUNTRY Financial
The COUNTRY Financial group (www.countryfinancial.com) serves about one million households and businesses throughout the United States. It offers a full range of financial products and services from auto, home, business and life insurance to retirement planning services, investment management and annuities.