If you look at the right data points, one thing becomes clear — a noteworthy amount of Americans feel insecure about their current financial situation, and its prospects of a better future.
Northwestern Mutual's 2024 Planning and Progress Study surveyed around 4,500 Americans and found much of that insecurity in the results.
The findings
33% of respondents reported feeling 'financially insecure', which is up from 27% in last year's report.
Inflation continues to be the top concern. 54% of adults said they actually expected it to increase this year, and only 9% said that their income was keeping up with the anticipated price hikes.
Interestingly enough, a decline in 'financial discipline' backdrops this. This year's report found about 45% of respondents considering themselves 'financially disciplined', a 5% drop from 2023 and down from 65% in 2020.
All-in-all, Americans feel like their top barriers to financial prosperity are — inflation (51%), 'the economy' (43%), a lack of savings (31%), personal debt (27%), and interestingly, health care costs at 22%.
What can we realistically do about this?
Admittedly, most of the concerns the vast majority of Americans express do seem like they're out of our control. Inflation, the economy, the labor market, elections, and politics are all pain points that most of us have little to no influence on.
This can feel like a very defeating position to be in, one that's prone to creating financial nihilism. But — it doesn't have to be; there's power in taking what we can into our own hands.
Practical steps we can take
Consistency is key. If you've had a mound of personal debt you've been trying to pay off, it can feel like the trek will never end, almost seeming pointless at times. This is a common feeling to have in the midst of a long journey, but pure, undeterred stubbornness and determination will eventually win. Whether it's debt, savings, increasing your income, or a long list of financial problems, it's comforting to know and believe that an unrelenting amount of consistency can eventually bury all of them. It will seem like ages in the midst, and months in hindsight.
Macroeconomics and politics are out of your control, but other things are not. If you're lucky enough to have a reliable income right now, have a plan for your money. There are important things you can do personally to mitigate the impacts of the macro environment. Save and invest consistently, eradicate bad debt, have a hand in your money management, optimize, optimize, optimize.
Know that the little things pay off and the boring things matter. "The main things are the plain things, and the plain things are the main things." And this couldn't hold more true than with money. Talking about doing the boring stuff right is not interesting, popular, or entertaining, but it's the foundation of what creates a sustainable, healthy financial life.
No comments:
Post a Comment