A recent survey by MoneyRates.com indicates that a growing number of Americans are experiencing emotional strain as a result of burdensome debt. A drastic increase in debt while not having enough savings for retirement makes things unbearable for some. Having too much debt and too little savings is one of the top financial regrets American consumers say they have.
The survey asked 2,000 American adults about their greatest financial fears, worries, and regrets. The study also asked respondents what they would like to change about their financial behaviors.
Some of the survey findings:
Financial anxiety affects many consumers. Respondents say that planning for the future is difficult because they don’t feel prepared to handle their basic needs. Americans say they are depressed because of an inability to sustain their present basic needs. A total of 35% or roughly one-third of the total respondents state that meeting their basic needs is the top reason they continue to fall into debt and have a difficult time saving.
Some have a short-term orientation when it comes to financial planning. Many American consumers are oriented to live in the present. Saving for retirement is not seen as an immediate priority. Fulfilling the needs of one’s current lifestyle (this is especially true for millennials) is often the main reason why today’s consumers have a hard time getting a handle on debt. Approximately 40% report regrets about not saving enough; 22% say they regret accumulating a lot of debt.
Extra money is often spent unwisely. Americans see extra money as extra money to spend. They often reward themselves when they get a windfall. Instead of paying off debt, they may use the money for investments, investments that usually lack planning.
Some respondents believe they have a spending addiction. The standard of living of today has drastically changed compared with what was considered a basic necessity a decade ago. With this change comes the losing battle of not spending every single penny on the luxuries some deem basic for the lifestyle that they have today. When asked what they would most like to change about their financial behavior, about 43% of respondents say they would like to reduce spending and increase savings. This is more than twice as many as the second-place choice of making wiser investment decisions.
Difficulty prioritizing needs versus wants. The survey showed that men are more concerned about making their life comfortable while women are concerned about meeting basic needs.