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U.S. Personal Finances: Future More Concerning Than Present
Economy

U.S. Personal Finances: Future More Concerning Than Present

U.S. Personal Finances: Future More Concerning Than Present

Story Highlights

  • 49% rate their current finances positively, down from 56% last year
  • Record-high 50% believe their financial situation is getting worse
  • Younger adults most affected by recent economic downturn

WASHINGTON, D.C. -- Although Americans' assessments of their current finances are not much lower than last year, 50% of Americans now say their financial situation is getting worse. This latest reading is, by one percentage point, the highest Gallup has measured in a trend stretching back two decades.

Unemployment has surged to the top of the list when Americans are asked to name the most important financial problem facing their family, and significantly more adults -- particularly young adults -- are worried now than were worried a year ago about being able to pay housing costs and other financial obligations.

These results are from Gallup's annual Economy and Personal Finance poll, conducted April 1-14.

Fewer Rate Current Financial Situation Positively

Currently, 49% of Americans describe their financial situation as either "excellent" or "good." A year ago, 56% rated their finances positively. The decline has been entirely offset by an increase in the percentage saying their situation is "only fair." The 15% of Americans describing their financial situation as "poor" is the same as last year.

Line graph. 49% rate their financial situation positively, down from 56% in 2019.

Notably, more Americans rate their financial situation positively now than did so during and immediately after the Great Recession. Between 2009 and 2012, 42% of Americans, on average, said their finances were excellent or good.

Additionally, a separate question finds 67% of Americans say they have enough money to live comfortably right now, virtually unchanged from a year ago (66%) and similar to 2008-2011 when it ranged between 65% and 69%.

But while most Americans' finances have not deteriorated in the first few weeks of widespread social distancing measures to prevent the spread of the novel coronavirus, they don't expect that to continue.

By 50% to 35%, Americans say their financial situation is getting worse rather than getting better, marking a sharp reversal from last year. Significantly more Americans also thought their finances were getting worse rather than better in April 2008, toward the beginning of the Great Recession.

Line graph. 50% say their financial situation is getting worse.

Positive ratings of one's finances have fallen a bit further in the past year among middle-income Americans (down 12 points) than among lower-income (down five) and upper-income Americans (down seven). However, optimism that their finances are improving fell most sharply among the upper-income group.

Many younger adults appear to have already been adversely affected by recent economic changes, with a 13-point decline among 18- to 29-year-olds in the percentage rating their current finances positively, roughly twice the decline seen among those aged 50 and older. Younger adults also show a disproportionately large decline in their personal financial expectations moving forward.

Changes in Positive Financial Evaluations, by Income and Age
How would you rate your financial situation today -- as excellent, good, only fair or poor? / Right now, do you think that your financial situation as a whole is getting better or getting worse?
% Excellent/Good % Getting better
2019 2020 Change 2019 2020 Change
% % pct. pts. % % pct. pts.
Annual household income
<$40,000 26 21 -5 47 27 -20
$40,000-$99,999 68 56 -12 61 40 -21
$100,000+ 83 76 -7 68 39 -29
Age
18-29 51 38 -13 79 46 -33
30-49 50 49 -1 60 37 -23
50-64 60 53 -7 50 31 -19
65+ 63 56 -7 40 27 -13
Gallup

Unemployment, Lack of Money Most Commonly Cited Financial Problems

When asked to name, in their own words, the most important financial problem facing their family, 12% of U.S. adults mention unemployment or job loss. A year ago, 3% gave that response. That nine-point increase aligns with reports that more than 20 million Americans have been laid off as many businesses around the country have been forced to close or dramatically scale back operations to prevent the spread of the novel coronavirus.

The 12% mentioning unemployment or job loss is the highest Gallup has measured since it first asked this question in 2005. On several occasions from 2009 to 2011, another time of widespread joblessness, 10% or 11% said unemployment was the most important financial problem facing their family.

Nearly as many Americans today say lack of money is their biggest financial challenge, although the 11% saying so is unchanged from last year.

Unemployment Moves to Top of List of Family Financial Problems
What is the most important financial problem facing your family today? [OPEN-ENDED]
2019 2020 Change
% % pct. pts.
Unemployment/Loss of job 3 12 +9
Lack of money/Low wages 11 11 0
Cost of owning/renting a home 8 9 +1
Healthcare costs 17 8 -9
Too much debt/Not enough money to pay debts 6 7 +1
Effects of coronavirus -- 5 +5
College expenses/Student loans/Student loan debt 8 5 -3
Retirement savings 5 4 -1
Stock market/Investments * 4 +4
State of the economy 1 3 +2
High cost of living/Inflation 6 3 -3
Supporting parents/children/grandchildren -- 2 +2
Lack of savings 1 2 +1
Taxes 8 1 -7
Credit card debt -- 1 +1
Social Security 1 * -1
Interest rates 1 * -1
Other 5 7 +2
None 20 18 -2
No opinion 2 1 -1
* Less than 1%
Gallup

As Americans' financial concerns have shifted to lack of employment, they have shifted away from healthcare costs. Mentions of healthcare have fallen from 17% last year to 8% now. The percentage mentioning taxes shows a similar decline of seven points, from 8% to 1%.

Unemployment is first, or tied for first, among all income groups, as well as among both those who say their financial situation is getting better and those who say it's getting worse.

Younger adults are significantly more likely than older age groups to say unemployment and housing costs are the biggest financial problems they are facing now.

  • Twenty-two percent of 18- to 29-year-olds mention unemployment or job loss, nearly twice the percentage of those aged 30 to 64 (12%).
  • Seventeen percent of 18- to 29-year-olds mention housing costs as their biggest financial problem, compared with 10% of those aged 30 to 49, 6% of those aged 50 to 64, and 3% of those aged 65 and older.

Heightened Worry About Many Specific Financial Obligations

The poll finds significant increases in the percentages of Americans worried about four specific personal financial issues. The greatest of these is a nine-point increase since 2019 in the percentage of Americans worried about not having enough money to pay their rent, mortgage or other housing costs, from 30% to 39%. There have also been meaningful spikes in Americans' levels of worry about not having enough to pay normal monthly bills, making minimum payments on credit cards and being able to maintain their standard of living.

Biggest Increase in Worry About Paying Housing Costs
Next, please tell me how concerned you are right now about each of the following financial matters, based on your current financial situation -- are you very worried, moderately worried, not too worried or not worried at all? (% Very/Moderately worried)
2019 2020 Change
% % pct. pts.
Not being able to pay your rent, mortgage or other housing costs 30 39 +9
Not having enough to pay your normal monthly bills 36 43 +7
Not being able to maintain the standard of living you enjoy 42 48 +6
Not being able to make the minimum payments on your credit cards 20 26 +6
Not having enough money for retirement 54 59 +5
Not being able to pay medical costs of a serious illness/accident 51 54 +3
Not being able to pay medical costs for normal healthcare 42 43 +1
Not having enough money to pay for your children's college 36 33 -3
Gallup

Nearly every age and income subgroup shows at least slightly greater worry about paying for housing, paying normal monthly bills, making minimum credit card payments and maintaining their standard of living. However, younger adults show much steeper increases in the percentage worrying about the first three of these financial problems than older adults do. This includes a 17-point increase in the percentage of young adults worried about paying their monthly bills, 16 points for making minimum credit card payments and 13 points for paying housing costs.

Changes in Concerns About Specific Financial Matters, by Age
Next, please tell me how concerned you are right now about each of the following financial matters, based on your current financial situation -- are you very worried, moderately worried, not too worried or not worried at all? (% Very/Moderately worried)
Paying housing costs Paying monthly bills Making minimum credit card payments Maintaining standard of living
% % % %
18-29
2019 37 39 22 45
2020 50 56 38 51
Change +13 +17 +16 +6
30-49
2019 34 41 28 41
2020 42 45 26 53
Change +8 +4 -2 +12
50-64
2019 32 37 20 45
2020 38 42 25 50
Change +6 +5 +5 +5
65+
2019 14 22 8 33
2020 23 28 19 36
Change +9 +6 +11 +3
Gallup

Increases in concerns about maintaining one's standard of living are greatest among upper-income adults. Currently, 37% of adults with an annual household income of $100,000 or more are worried about maintaining their standard of living, up 15 points from last year. Among middle-income adults, the increase is seven points -- from 37% to 44%. Lower-income adults are the most worried about keeping their standard of living, but about as many worry now (61%) as did so a year ago (59%).

Amid these changes, not having enough money for retirement and not being able to pay medical costs in the event of a serious illness or accident remain the most common financial worries, as they have for the past two decades.

Implications

The economic slowdown brought about by efforts to limit the spread of the novel coronavirus has affected millions of Americans -- although less than 10% appear to be worse off right now than a year ago, according to assessments of their current finances.

However, many more believe their financial situation is getting worse even if the effects of the slowdown haven't fully hit their bank accounts yet. This pattern was apparent during the Great Recession -- more people anticipated a declining financial situation before they reported a negative change in their current financial situation. The longer the economic slowdown continues, the worse it will get for an even larger proportion of Americans.

The immediate economic impact of the COVID-19 situation, for most Americans, seems to be heightening their anxiety about what could happen as opposed to altering their prevailing circumstances. But younger adults -- who are more likely to be employed in the industries most affected by the shutdown, such as retail, hospitality, service and manufacturing -- appear to be the exception. They are more likely than older adults to indicate their financial situation has already been harmed and to cite unemployment as the most urgent financial problem they are facing right now.

Younger adults' expectations for their future finances have declined the most, and they show disproportionate increases in concerns about meeting their most basic financial obligations, including paying for housing, normal monthly bills and even making minimum payments on their credit cards.

Many taxpayers have received their federal government relief payment, but for people -- especially young people -- faced with unemployment, the $1,200 only goes so far. They will likely need much more assistance through government or charitable means in order to get through the crisis at a time when job prospects are grim.

View complete question responses and trends (PDF download).

Learn more about how the Gallup Poll Social Series works.


Gallup https://news.gallup.com/poll/308936/personal-finances-future-concerning-present.aspx
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