Most Americans struggling despite booming economy
The economy is growing, unemployment is low and, lately, workers are starting to see some wage gains.
But a new survey from the University of Southern California and the nonprofit Center for Financial Services Innovation makes the case that, despite an overall healthylooking economy, many Americans struggle to save, pay bills and remain on firm financial footing.
The survey, called the Financial Health Pulse, found that only 28 percent of American householders are financially healthy, meaning that they are in control of their spending, are saving money, don’t have too much debt and are planning for the unforeseen.
An additional 55 percent are financially coping — struggling in a few areas, but doing OK in others — while 17 percent are classified as financially vulnerable, meaning they are struggling with most aspects of their financial lives.
Jennifer Tescher, CFSI’s chief executive, said the goal of the survey, which the group plans to do annually, is to get a sense of how Americans are doing without relying on the kind of high-level economic data that policymakers typically focus on.
"There’s this rosy-eyed view of what’s going on in the economy that does not comport with what’s going on on Main Street,” she said. “There’s a significant disconnect between the data and people’s lives.”
The survey, conducted from April to July, included questions about spending, bill payments, short- and long-term saving, debt, credit scores, insurance and financial planning.
Among the survey’s roughly 5,000 respondents, nearly half — 47 percent — said they spend as much or more than they earn and 36 percent said they cannot pay all of their bills on time. The survey also found that:
• 45 percent of Americans said they don’t have enough savings to cover three months of expenses and 26 percent said they don’t have enough for a single month.
• 30 percent said they have more debt than they can manage.
• 16 percent said they have delayed seeking medical care because of debt.
• 17 percent said they don’t plan ahead financially.
This round of the survey is based only on responses from participants, but in the coming years USC and CFSI plan to include actual financial transaction data from respondents. Working with financial information firm Plaid, researchers will ask survey respondents for permission to pull anonymized transaction data from bank accounts.
Those data will help flesh out gaps in respondents’ memories, said USC economist Jeremy Burke, who helped design the survey. For example, bank data could help researchers figure out how much respondents are actually spending and earning, he said.
“We can look at how survey responses match what we really see and get an understanding of where people’s blind spots are and how those blind spots might affect their financial health,” Burke said.