A 2010 Scottrade survey of 1,000 Americans age 18+ (485 male, 515 female) found that our attitudes of concern and of financial conservation that so dominated the last few years in the run up to the Great Recession have relaxed considerably. Simply put, Americans are far less worried about their finances having come through the Recession than they were in the middle of it. Even retirement fears are fading away, along with the focus on retirement planning, saving, and even debt reduction … unless you’re under 29 years of age. That demographic is as concerned as ever.
While the trends toward declining concerns and financial conservation DO span all generations, the Scottrade study found a surprising exception for Generation Y (born 1983 to 1992). Surprisingly, it is that generation whose concerns are growing the most!
Why the continued (and growing) financial concern amongst the younger generation?
Although the study didn’t specifically address that, perhaps they see the older generations plunging them into more and more government debt and the ensuing bailouts. Perhaps they “got it” during this last go-around with a dip in the economy. Perhaps their 20 percent un/under-employment rate has caused them to see the light that the fully employed Boomers and Gen X’ers can’t fathom.
But perhaps most disturbing trend was the 40 percent increase in those claiming that they are “doing nothing” to address any financial concerns. Failing to plan? We all know where that leads.
The Five Key Financial Trends
- America’s financial and retirement concerns have substantially relaxed
- The belt tightening of 2009 – 2009 is subsiding
- The focus on planning, saving, and debt reduction is fading
- Seniors breathed a sigh of retirement relief
- Americans’ faith in the market weathered the storm
America’s financial and retirement concerns seem to have relaxed
Despite all our continued economic uncertainty, despite record unemployment, despite record numbers of business closings and foreclosures, Americans seem to feel that the worst of the economy’s setbacks are over, and their relief is so pronounced that many financial concerns have dropped to a four-year low, including:
- Getting a good Return On Investment (ROI)
- Managing day-to-day expenses
- Affording personal/family education expenses
- Protecting wealth
- Protecting family from premature death/disability
- Paying off credit card balances
- Saving enough for a major purchase
- Having too much debt
- Controlling the urge to spend
- Improving credit rating
Concerns specific to retirement also have faded.
The number of Americans who feel nervous or afraid about retirement dropped dramatically since last year (from 55 to 40 percent). As fears faded away, so did concerns, which declined for 9 out of 13 key issues surrounding retirement.
Will Social Security still be there?
One topic that remains a top concern is the future availability of Social Security. Doubts about its solvency just won’t go away – more than half of Americans (54 percent, ME included) remain worried that Social Security will not be enough to live on. Some of us are convinced that the old girl won’t even be recognizable from her current form when we decide to retire. Ironically, Social Security wasn’t designed as the sole source of retirement funds but it has certainly evolved to that end in the minds of many Americans. Gen Y is especially worried about this issue, and their fears hit a four-year high of 53 percent this year. This increase is a significant jump from last year, when 40 percent of Gen Y expressed concern.
What to do?
Buck the trend! STAY concerned about your financial health. Continue to invest in your future whether through a savings account or through investing with a brokerage like Scottrade. Pay off your debt, especially that high interest debt and refuse to use your credit card unless you can absolutely pay it off within the grace period. Make SMART money moves today, regardless of your age, so that when tomorrow comes you’re better prepared than your peers.