Bad economy? Not everyone thinks so
A recent survey by USA Today and Gallup of 1,008 people demonstrates that folks are increasingly pessimistic about the economy. No big surprises there, but some groups are feeling a lot worse than others. Five different types were identified in the study:
- Prudent Pessimists have the bleakest outlook of any group. 90% of this group define themselves as "savers" and 87% say the current economic situation is the worst in their lifetime. 57% say outside factors affect their personal finances "a great deal."
- Bad Shape and Suffering know they are in trouble. Everyone in this group (100%) says their personal financial situation is "only fair or poor." The highest percentage of any group (74%) say their are "spenders, not savers." The highest percentage of any group (62%) say their personal finances are affected by factors outside their control.
- In-Control Realists are a pretty confident group. This group is simply riding the tide. They have seen recessions, and some, the Great Depression, and know that things will turn around sooner or later.
- No Need to Panic. This group is simply staying the course. They have jobs and don't worry that much about the economy. Like the in-control realists, they are simply waiting for things to improve.
- I'm OK, the Economy's Not. This group has mostly white, educated, folk in the upper income brackets. They recognize the economy is struggling but it doesn't affect them much except in their portfolio. The lucky ones moved their stocks to cash before the bottom dropped.
Not surprisingly, the people least affected by the recession are those that have not lived on credit or bought more than they really can afford. It's the old rule: spend less than you earn. Somewhere in the high flying '90s and early 2000s, people forgot that basic money principle.