smart spending

Americans' feelings on financial security


Consumers are suddenly brimming with optimism. In's newly-released Financial Security Index, consumers' feelings of financial security hit a new high, aided by new stock market records and continued job growth. The Financial Security Index surged to a new high of 101.5, up from 96.8 in February. A reading above 100, such as this month's, is rare ... we've seen it just 3 times in the 28 months of conducting these polls. But it indicates that consumers are feeling improved financial security over the past 12 months.

How can this possibly be, with all the dysfunction in Washington and the recent expiration of the payroll tax cut digging into Americans' take-home pay? Well as far as that payroll tax cut is concerned, found that more than half of working Americans either haven't noticed or have been unaffected by the payroll tax cut expiration.

Even more shocking is that the lowest income households were least likely to have cut back on spending and most likely not to have noticed the change in the payroll tax. These results contradict the widely held assumption that lower income households would feel the biggest squeeze from the payroll tax cut expiring.

So who did cut back on spending? Those most likely to have cut back were households with income between $50,000 to $75,000 per year. And when evaluating on the basis of educational attainment, households headed by college graduates were most likely to have cut back and those with less than a college degree were most likely not to have noticed.

For more on this month's Financial Security Index, visit our website,


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