3 in 8 Americans Live on Edge of Financial Disaster
Americans feel the most financially secure that they have in four years. But the good feelings stand in contrast to the reality that 37 percent are on the "edge of financial disaster", according to a statement by Bankrate.com Chief Financial Analyst Greg McBride.
A new Bankrate.com-commissioned poll of 1,003 adults with a margin of error of plus or minus 3.7 percentage points showed that when it came to financial basics, 37 percent of Americans had no net resources to deal with an emergency. Twenty-four percent had more credit card debt than they had emergency savings and another 13 percent had no savings. At least the latter had no credit card debt in addition.
Adults between the ages of 30 and 49 were in the worst shape, as 32 percent of them had more credit card debt than savings. Only 21 percent of those under 30 and 14 percent of people 65 and older had more debt than savings. Those same two groups tended to have more savings than debt.
The group most likely to have neither credit card debt nor savings was those with the lowest income. Of those making less than $30,000 a year, more than 20 percent had neither debt nor savings. Only 5 percent of those making at least $75,000 were in a similar situation.
When asked how they felt about the amount of savings they had compared to a year ago, 47 percent said the same, 22 percent said more comfortable, and 28 percent felt less comfortable. Among unemployed workers, a third felt less comfortable, compared to 25 percent of those with jobs. Thirty-seven percent of those making between $30,000 and $49,900 a year felt less comfortable versus 21 percent of those making $75,000 or more.
People Still Feel More Confident
And yet, the savings picture is actually an improvement and part of a more optimistic sense about financial security. Bankrate's financial security index reached, at 104.8, the highest level it has in its four-year history, beating a previous high in January. Any figure above 100 shows a sense of increased financial security over the past 12 months.
Twenty-four percent of respondents felt more secure in their jobs, 63 percent felt the same, and 12 percent felt less secure, with 1 percent either uncertain or refusing to answer. Fifty-two percent felt the same as they did 12 months ago about the amount of debt they had while 29 percent were more comfortable and only 17 percent were less comfortable. So even if savings were a little more negative, improvement in the debt picture apparently more than made up for it.
However, the picture is more strained for those between 50 and 64. As they near retirement age, 25 percent felt less comfortable with their amount of debt. That compares to 12 percent of millennials and 17 percent between 30 and 49.
Also, 28 percent of people said their net worth was higher, 56 percent said it was the same, and 13 percent described it as lower.