Americans Stressed About Economy and Personal Finances more than Job or Health
Workers' top financial New Year's resolutions: save and pay off credit card debt
New research from the Principal Financial Well-Being IndexSM shows the economy is the greatest source of stress for Americans, followed by their own personal finances, job and health. Half of retirees (52 percent) and two out of five workers (42 percent) reported a high stress level with regard to the economy, while 30 percent of retirees and 34 percent of workers said personal finances caused high stress. Less than a third of workers (30 percent) say their job causes stress and far fewer (19 percent of retirees and 15 percent of employees) report stress over physical health.
The Principal Financial Well-Being Index, which surveys both American workers at growing businesses with 10 to 1,000 workers and retired Americans, is released quarterly by the Principal Financial Group® and is conducted online by Harris Interactive®.
Americans over the age of 50 (51 percent of those 50-64 years and 59 percent of those 65 years and older) reported higher stress levels regarding the economy than those under 50 (30 percent of those 18-34 years and 40 percent of those 35-49 years). Overall, females (41 percent) were significantly more likely than males (29 percent) to rate their stress level related to their personal finances as high.
"In today's uncertain economic environment, it is important for Americans to focus on what they can control versus what they cannot," said Luke Vandermillen, vice president of retirement and investor services at The Principal®. "Having a financial strategy and actively saving for financial emergencies and retirement can help reduce some of the pressures and anxiety many are feeling today."
Workers and retirees nervous about ongoing market volatility
With the economy a main source of stress, many Americans also report concern over market volatility impacting their long-term and short-term financial well-being. Two out of five workers (41 percent) and one-third of retirees say they are nervous about their ability to save due to market volatility. Another quarter of workers (26 percent) and one-third of retirees have reduced their spending because they have lost money due to market volatility. Furthermore, 22 percent of workers and 18 percent of retirees have moved to a more conservative investment approach.
Those who work with an advisor are more likely to take action, such as:
- Reducing spending because they have lost money (33 percent of workers who use a financial professional; 24 percent of workers who do not use a financial professional);
- Moving to a more conservative investment approach (33 percent of workers who use a financial professional; 19 percent of workers who do not use a financial professional).
“The fact that Americans are paying attention to the market is a good sign," said Vandermillen. "With today's volatility, it is more important than ever to have a plan and stick to it. Working with an advisor is a good first step in making sure you are moving toward greater long-term financial security.”
Americans seek to correct 2011's financial blunders in 2012
When asked to select their top financial blunder of 2011, approximately one out of five (19 percent) workers said that they did not save enough during the year. And 18 percent of workers said increasing debt was their top mistake.
Looking toward 2012, workers' top financial-specific New Year's resolutions were saving a set amount of money each month and paying off credit card debt—both selected by 26 percent of workers. Twenty-one percent of workers also said they are resolving to reduce their spending by a specific amount each month in 2012.
While Americans are hoping to right the wrongs of 2011, many have concerns about the coming year, which may impact their financial decisions. For workers, top concerns for 2012 were:
- Economic uncertainty (62 percent)
- Gas prices (58 percent)
- Health care costs (55 percent)
- Food prices (49 percent)
- Increased taxes (45 percent)
Americans spending smarter this holiday season
- More than two out of five workers (41 percent) are spending less on gifts and scaling back (39 percent) the number of people they will buy for this year.
- Most will pay for holiday gifts without going into debt. Thirty-one percent will pay with credit cards which they will pay off, 29 percent will pay in cash and 22 percent will pay by debit card.
This Principal Financial Well-Being IndexSM survey was conducted online within the United States by Harris Interactive on behalf of the Principal Financial Group® between October 20 and October 31, 2011 among 1,121 employees and 533 retirees. Propensity score weighting was also used to adjust for respondents’ propensity to be online.
This is one in a series of quarterly studies to identify and track changes in the workplace of small and mid-sized (growing) businesses. The first Principal Financial Well-Being IndexSM survey was conducted in the United States in 2000.
About the Principal Financial Group
The Principal Financial Group® (The Principal ®) is a retirement and global asset management leader. The Principal offers businesses, individuals and institutional clients a wide range of financial products and services, including retirement, investment services and insurance through its diverse family of financial services companies. A member of the FORTUNE 500®, the Principal Financial Group has $335.8 billion in assets under management and serves some 16.5 million customers worldwide from offices in Asia, Australia, Europe, Latin America and the United States. Principal Financial Group, Inc. is traded on the New York Stock Exchange under the ticker symbol PFG. For more information, visit www.principal.com.
About Harris Interactive
Harris Interactive is one of the world's leading custom market research firms, leveraging research, technology and business acumen to transform relevant insight into actionable foresight. Known widely for the Harris Poll and for pioneering innovative research methodologies, Harris offers expertise in a wide range of industries, including health care, technology, public affairs, energy, telecommunications, financial services, insurance, media, retail, restaurant and consumer package goods. Serving clients in more than 215 countries and territories through its North American, European and Asian offices and a network of independent market research firms, Harris specializes in delivering research solutions that help clients stay ahead of what’s next. For more information, visit www.harrisinteractive.com.
- Survey of 1,121 employees and 533 retirees conducted October 20-31, 2011.
- “The Principal Financial Group” and “The Principal” are registered service marks of Principal Financial Services, Inc., a member of the Principal Financial Group.
- As of September 30, 2011.