We Still Spend More Than We Earn

Spend More You'd think we might have learned our lesson from the recession and reined in our spending a bit, living within our means and even putting a little away for a rainy day. But not so, according to a recent survey commissioned by accounting giant PwC. Almost half (49 percent) of working American adults find it difficult to meet their household expenses on time (up from 43 percent in 2010).

They attribute that to lingering cash- and debt-management challenges. Even those earning $100,000 or more annually say it's a challenge to make their monthly payments, let alone save for retirement.

Additionally, nearly one-quarter (24 percent) of employees surveyed report using credit cards to buy monthly necessities because they couldn't afford them otherwise, up nine percentage points from 2010; among those earning $100,000 or more annually, that number jumps to 34 percent. Half of survey respondents consistently carry balances on credit cards and 42 percent of respondents find it difficult to make minimum credit card payments on time (up from 28 percent in 2010).

Given this cash and debt mismanagement, it's no surprise that 61 percent of survey respondents say they find dealing with their financial situation stressful and 56 percent say their stress level has increased over the past 12 months. Meeting day-to-day expenses is now more of a concern than funding retirement.

According to the survey, the financial issues that worry people most include not having sufficient emergency savings for unexpected expenses (25 percent), not being able to meet monthly expenses (20 percent) and not being able to retire when they want to (18 percent). These issues were followed by concerns around not being able to keep up with debt (13 percent) and being laid off from work (11 percent).

"The results clearly show that retirement is not the most pressing financial concern weighing on employees' minds. In addition, the financial distractions and resulting levels of stress may cause a loss of productivity and have an impact on employee health," said Kent Allison, partner in PwC's Financial Education Practice. "While it's important that employees put money aside for retirement, they may be hesitant to save for the future if it will exacerbate existing debt and cash-flow problems in the near-term."

Retirement? What retirement? 46 percent of those surveyed plan to delay it, for reasons like not having enough saved (34 percent), retirement investments that have declined in value (18 percent), too much debt (14 percent), need to keep health care coverage (14 percent), supporting children/grandchildren (9 percent), don't want to retire (9 percent) and other (2 percent).

Maybe the advice we've been getting from those members of the Silent Generation who lived through the Great Depression is not so bad after all. Learning how to live on less than we earn seems to be a pretty good idea right now.

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