Sur­vey: Most Amer­i­cans aren’t sav­ing, strug­gle to pay their bills de­spite grow­ing econ­omy

Houston Chronicle Sunday - - BUSINESS - By James Ru­fus Koren

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 healthy-look­ing 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 U.S. house­hold­ers are fi­nan­cially healthy, mean­ing 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 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.

Mark Wil­son / Getty Im­ages

Among the Fi­nan­cial Health Pulse sur­vey’s roughly 5,000 re­spon­dents, nearly half — 47 per­cent — said they spend as much or more than they earn.

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