Americans dedicated to long-term financial wellbeing, survey shows

Americans are devoted to preserving their long-term financial wellbeing and would rather give up eating at restaurants and using technology than stop saving for retirement, a new survey shows.

Just 2% of the 1,005 U.S. adults participating in a telephone survey said the one action they most likely would take in a financial pinch would be to stop contributing to their retirement accounts. One per cent would skip utility payments, and another 1% would put off rent or mortgage payments, according to the survey conducted for the AICPA by Harris Interactive for the US’s National Financial Literacy Month.

Cutting back on eating out was the step Americans most frequently said they would take in a financial crunch, selected by 41% of poll participants. Twenty per cent said they would cut off cable TV; 8% said they would end mobile phone service; and another 8% said they would stop downloading songs and digital products.

Jordan Amin, chairman of the National CPA Financial Literacy Commission, said in a telephone interview that the survey results are a good sign that Americans would eliminate what he called “discretionary” items rather than long-term necessities in a financial pinch.

The survey also shows that Americans’ financial situation overall has taken a slight turn for the better in the wake of the financial crisis. Twenty-four per cent reported being better off than a year ago, while 23% reported being in a worse position. The remaining 53% said they are in the same position as a year ago.

In 2011, 29% said they were “worse off” than the previous year, while 16% said they were “better off”.

“I think that part of the reason people are better off or perceive themselves to be better off is that … people are making [changes] to their behaviours in terms of their discretionary habits and necessities,” Amin said. “That control allows people to feel that they’re better off rather than worse off even if things might be roughly the same.”

An overwhelming majority of the 2012 poll participants (94%) said they have some kind of financial concern. Forty-one per cent identified basic living expenses—which include the cost of gas, uninsured medical expenses, and lack of emergency savings—as their top financial concern. Another 27% identified their main concerns as long-range goals such as paying for education and saving for retirement.

Amin said common-sense tactics can take some of the sting out of rising fuel prices. “We’ve all run to the grocery store, gone home, and then run to the drugstore in the same shopping centre,” he said. “Try to combine those trips. Try to carpool. Try to go easy on the slamming on the gas just so you can slam on the brakes when you get to the next traffic light. It’s little things like that, that people can do.”

Since 2007, the AICPA has conducted an annual survey of Americans to determine their top financial concerns and assess their financial wellbeing. An AICPA website, 360financialliteracy.org, is populated with tools and advice to help Americans successfully manage their finances. April has been designated as National Financial Literacy Month.

Amin said this year’s survey results are encouraging.

“What our survey does show is that things are getting better … and that Americans as a whole are taking more control of their financial future and making better-educated decisions,” he said. “So the things that we can control, we seem to be getting our arms around. And the things that we can’t, we have to continue to be prepared for.”

—Ken Tysiac (ktysiac@aicpa.org) is a CGMA Magazine senior editor.