Savings remains a concern: Nearly one-third have cut back on spending in the wake of the payroll tax cut
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Americans’ feelings of financial security improved considerably over the past month, according to a new Bankrate.com survey. Bankrate’s March Financial Security index reached 101.5, the highest since the monthly polls began in Decemeber 2010. The 4.7-point improvement from February is the second-biggest monthly gain in the index’s history, and only the third time in the past 28 months that consumers are feeling better about their financial security compared with a year ago, Bankrate reports.
The improvement is attributed to the recent stock market rally and continued job growth. The economy added 236,000 jobs in February, while initial claims for unemployment are at levels consistent with sustained job growth.
Nearly half (48 percent) of Americans surveyed said they haven’t noticed any impact the January 1 expiration of the payroll tax cut has had on their personal financial situation. Seven percent said have been unaffected by it. Almost one-third (30 percent) said that they have cut back on their spending.
Almost two-thirds (64 percent) of respondents said they feel the same about their job security as they a year ago. Eighteen percent said they feel more secure, while 17 percent said they feel less.
Saving, however, seems to be of heightened concern. While nearly half (48 percent) feel about the same about the amount of money they have in savings compared with 12 months ago, 31 percent said they feel less comfortable, compared with 19 percent who feel more comfortable about their savings.
Bankrate’s March Financial Security index is another encouraging sign that Amerians feel better off now than they did one year ago. A February survey of Affluent households conducted by Millionaire Corner found a high level of satisfaction with their current financial situation. On a scale of one-to-10, with 10 being “very satisfied,” 62 percent rating their financial situation at least an 8.
Not surprisingly, satisfaction with their current financial situation increased with wealth level (45 percent of Millionaires vs. 22 percent of those with a net worth between $100,000 and $500,000). But, tellingly, financial literacy also played a factor in financial security. Fifty-six percent of respondents who are the most confident in their financial knowledge said they were very satisfied compared with just 23 percent of those who said that they have little or known.
Donald Liebenson writes news and features for Millionaire Corner. He has been published in the Chicago Tribune, The Chicago Sun-Times, The Los Angeles Times, Fiscal Times, Entertainment Weekly, Huffington Post, and other outlets. He has also served as a marketing writer for Chicago-based Questar Entertainment and distributor Baker & Taylor.
A graduate of the University of Southern California, he is married with a college-age son. He also writes extensively about entertainment.