Between inflation and an international conflict, Americans’ financial behavior will likely be affected for months to come, making financial literacy even more important.
According to Primerica’s first quarter 2022 Middle-Income Financial Security Monitor, middle-income households remain concerned about inflation, with a majority indicating they are considering lifestyle changes to cut back on spending. In fact, 66% say inflation already has or is likely to impact a major purchase decision and many people are contemplating lifestyle shifts because of rising costs.
In addition, 67% say their income is falling behind the cost of living and just 22% believe they will be better off financially a year from now. When asked to rate their ability to save for the future, 66% of respondents reported either “not so good” or “poor”—which is a four-percentage increase just since December (62%).
Concern over the Ukraine invasion is also top of mind, with 61% saying they expect it will have at least some impact on their financial behavior and decisions over the next few months. Yet, in considering this current economic environment, many respondents also indicated that they feel anxious about tracking their financial health and do not know where to start.
In addition, while a majority (85%) of respondents believe people should start planning for retirement before they turn 30, many are not following their own advice. Nearly a third (30%) say they do not contribute to a savings account, follow a budget, contribute to an investment account or set a financial budget each month. Among the biggest challenges people cite for keeping track of their finances are anxiety (26%) and not having time (18%).
“As we face the highest inflation levels in the past 40 years, it is critically important for middle-income families to understand how to budget, manage debt, save for the future and protect their incomes,” notes Primerica CEO Glenn Williams. “These priorities compete for limited financial resources, making the need for professional guidance more important than ever.”
Additional findings show that the primary items people anticipate cutting back on include restaurant/take-out meals (57%), keeping current technology instead of upgrading (44%), and budgeting food purchases or cutting back on groceries (37%). Many are also looking at delaying a major purchase, with 40% indicating they have already done so and another 26% considering it.
Meanwhile, there was a slight decline in the number of respondents who said they are at least somewhat likely to change jobs in the next year, from 33% of respondents in the firm’s December poll to 26% in the current poll. Those likeliest to change jobs include adults ages 18-34 (35%) and Midwesterners (34%).
The monitor is a quarterly national survey to track the financial health of those with annual household incomes of $30,000-$100,000. The current findings are based on online polling conducted by Change Research from March 4–8, 2022, among 980 U.S. adults over 18.
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