When it comes to making ends meet or enjoying good fortune, many Americans are struggling today, according to a new study from Lincoln Financial Group.
The Radnor, Pennsylvania-based financial services company just released its 2017 Financial Focus: Goals and Reflections of Today’s Consumer study.
The analysis examines short- and long-term financial goals for Americans, strategies that can help them reach those targets, and forces hindering them from increasing wealth.
Heavy Debt Load Big Burden for Many Folks Trying to Make It
A momentous 24% of people—nearly 1 out of 4 Americans—report they are “barely getting by” or worse financially. A high level of debt is the driving factor hurting this group, with 42% saying debt is a major problem. And when thinking about their financial futures, 45% of these individuals are scared most by not being able to pay off debt. This compares to only 16% of the individuals who say they are “comfortable” or “well off” financially.
Simultaneously, the study offered some upbeat trends. Forty-eight percent with financial goals say they will be in a much better place financially in the next four years, versus a measly 12% of those with no goals. Those who make New Year’s resolutions also tend to see positive progress: a robust 72% of those who made resolutions this year report that they are progressing with those resolutions, which often include meeting their financial goals.
Most Satisfied Individuals Take Specific Actions to Build Finances
All told, the study findings show that people who apply specific actions to their finances for future growth are the most likely to feel financially confident and secure.
For instance, 52% of those making resolutions have a retirement plan, 45% own life insurance, and 44% have at least one investment account. And when money is scarce, 31% of these goal-setters recently passed up vacations. But this group doesn’t sacrifice their savings—nearly 60% reported they in fact have never sacrificed savings.
The study was based on an online survey of 2,500 adults 18 years of age or older in the United States. It includes responses from 331 African Americans.
“Those who are progressing toward their goals and resolutions are first and foremost working to ensure they have a solid foundation to build upon,” Dick Mucci, president of Group Benefits at Lincoln Financial, stated in a press release.
“Putting some extra money toward debt, savings, and insurance coverage certainly pays off in the long run—and those who have financial goals understand this,” he said.
Mixed Emotions Surface on Retirement and Providing for Families
Additionally, the study showed that many people feel both excitement and fear when it comes to saving for retirement and providing for their families.
Some 46% of Americans report they are excited about having enough money for retirement, but 35% are intimidated by saving for it. This number is highest for Gen X, where 47% say they fear saving for retirement. When it comes to providing for their families, 41% are eager about it. But the fear factor comes into play for 27% of the general population when it comes to that situation, with the number rising at 38% for young millennials. Unforeseen health or accident expenses are frightful for 42% of Americans.
“The things that excite and scare us in regards to money are the same for a reason—they impact one another and are critically connected,” said Mucci. “Without the right protections in place, an accident or illness can derail retirement savings. But if you focus on the outcomes you want and ensure you take the steps to get there, you’ll wind up in a good place.
An employer-sponsored retirement plan is a great way to build savings, and insurance coverages offered through the workplace can help protect against the financial challenges that could come with an unexpected injury or illness.”
People with financial goals are four times more likely than those with no goals to feel they will be in a much better place financially in the next four years.
The Four Tips to Intensify Your Financial Future
Take advantage of workplace benefits.
For instance, disability insurance protects your paycheck if you are unable to work due to an injury or illness. Accident insurance helps pay expenses not covered by medical insurance. Critical illness insurance provides funds to cover daily expenses while you recover from an illness.
Don’t sacrifice savings.
Focus on paying debt, but leave some room to save for the future. Perhaps start with an employer retirement plan to benefit from the employer match.
Start an emergency fund.
It could help you pay for unexpected expenses and using a credit card to cover sudden calamities. Examine taking a second job or doing a yard sale, both ways to make extra cash to help pay debts faster.
Open a savings account at a different bank or credit union, making it tougher to tap into your nest egg.