How are you feeling? How are you really feeling?
The stock market has been on a rollercoaster ride, spooking and confusing investors. Political tensions with China are fragile and unpredictable. There’s growing concerns among business leaders of a recession in 2019. And yet Americans say they feel better about key aspects of their financial security than they did a year ago, according to the annual “New Year’s Resolution Study” from Allianz Life Insurance Company of North America released late Thursday.
Here are the key findings:
• 23% of people surveyed say they’re concerned about stagnant wages, but that’s down from 30% last year.
• 24% of millennials cite job security as a top concern, but that percentage is also significantly reduced from 37% in 2017.
• 49% of Americans say they will choose health and wellness as their top priority for 2019 versus 27% who chose financial stability.
That gap between people who chose health and wellness over financial stability is the largest in six years. Likely encouraged by the lowest unemployment rate in 48 years and wages up over 3% on the year, 29% of respondents aged 18-34 cited stagnant salaries as one of their most worrisome threats versus 37% last year. (The survey, which this year received answers from a nationally representative sample of 1,278 respondents, is in its 10th year.)
“Many people seem to be more positive about their personal financial situation, with millennials in particular displaying a curious resistance to financial despondency,” said Paul Kelash, vice president of Consumer Insights, Allianz Life. “The only warning might be to ensure personal optimism doesn’t lead to unnecessary spending that can derail a financial plan.” (He has cause for concern: Revolving credit, which includes credit-card debt, recently exceeded $1 trillion.)
There are also signs that young people, in particular, will continue spending in 2019. Despite reporting better financial habits, the latest report noted “some concerning trends.” Only 50% of people listed money management as a New Year’s resolution they’re most likely to keep, down from 60% last year. What’s more, the desire to better manage their money and put more money aside for a rainy day dropped for all respondents to 37% this year from 42% in 2017.
The long-term change in people’s financial perspective appears more bleak than the Allianz study suggests. The Pew Research Center, a nonprofit think tank in Washington, D.C., recently asked nearly 43,000 people in 38 countries if they felt better off than 50 years ago. Residents in 20 countries said people like them were better off than they were half-a-century ago. The U.S. was among 18 countries in which people said they were actually worse off than half a century ago.
As for savings, the overall picture is not as healthy as it may seem for Americans. The median U.S. household currently holds just $11,700 in savings, according to an analysis released last August of Federal Reserve and Federal Deposit Insurance Corp. data by personal-finance site Magnify Money. The bottom 20% by income have no savings and the second lowest 20% income earners have $26,450 saved. (Median balances or the midpoint value are lower than the average savings rates.)
People may have reason to care less about the recent stock-market volatility, but perhaps for all the wrong reasons. Just over half of Americans own stocks, a Gallup report recently concluded. That includes 401(k) plans, shares in an equity mutual fund and/or an IRA account. Worse, two-thirds of Americans do not even participate in or have access to a 401(k) plan, according to the U.S. Census Bureau. In other words, they simply don’t have a vested interest.
