WASHINGTON–Perhaps not too surprisingly, a new survey of American consumers has found nine in 10 Americans are concerned about the current cost of living in the United States, with the greatest concerns being expressed around credit card debt.
The CFP Board Consumer Sentiment Survey — Cost of Living found that 63% of Americans are concerned about purchasing necessities, such as food and clothing, and 55% are concerned about paying their rent or mortgage.
According to the Certified Financial Planner Board “add Americans' worries about the cost of living (89%) as well as inflation and price increases (87%), and it is no surprise that they are buying items on sale (72%), buying cheaper brands (65%), cooking at home (64%) or buying fewer products (63%).”
The Findings
Among the other findings, according to the CFP Board:
- While there are similarities between various age groups, there are also stark differences. For example, consumers 45 and older are more concerned than their younger counterparts about the cost of living (92% vs. 85%) and inflation or price increases (94% vs. 80%). These older consumers are also more likely to buy items on sale (74% vs. 71%) and cook at home (65% vs. 63%).
- The ability to save money is a concern for everyone (82%). This concern increases for those 45 and older (86% vs. 78%), perhaps because of the shorter time period they have to save. This is also true for current savings or emergency funds; 75% of those 45 and over are concerned compared to 68% of those under 45, the CFP Board said.
- With 69% of consumers concerned about preparing for retirement, one-third (34%) have saved more for retirement this past year. Over the past year, 27% diversified their portfolios, 21% pushed back retirement and 16% (1 in 6) purchased long-term care insurance.
- Americans are most concerned about credit card debt (96%) and medical debt (78%). Amidst the student loan crisis, only 23% are concerned about student debt, with that number increasing to 40% for consumers under 45.
- Younger generations are also more likely to make decisions that could impact them negatively in the long term. Investors under 45 were more likely to delay credit card payments (29% vs. 17%) and delay loan payments (25% vs. 16%). However, both generations were likely to withdraw money from a retirement account (24% of those under 45, 23% of those 45 and older).
“Those actions could have negative consequences,” the CFP Board said. “While younger consumers could benefit from financial advice to avoid these types of actions, the survey shows that they were proactive in establishing or adding to an emergency savings account (49% vs. 42%) and invested in the stock market to take advantage of potential growth (37% vs. 31%).”
Half Have Worked With Planner
The survey also found more than half of American consumers (53%) currently work or have worked with a financial planner. Young adults (38%), however, are more likely to seek the counsel of a financial planner in the future than older adults (22%).
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