Americans are feeling positive about their financial security — and that’s a good thing for the slowly recovering economy. This is the first time Bankrate’s Financial Security Index stayed in positive territory for three consecutive months since the survey began in December 2010. While it was down slightly from the previous month, dropping 0.2 points to 100.2, there were improvements in job security, comfort level with debt, net worth and overall financial situation compared to one year ago.
Bankrate’s Financial Security Index gauges how Americans feel today versus a year ago on vital financial matters. An index value of less than 100 indicates declining levels of financial security; a value greater than 100 reveals higher levels of security compared to 12 months ago.
The only comfort level that remains in negative territory is savings, with 33 percent of those surveyed feeling less comfortable with their savings now compared to a year ago. Only 20 percent of respondents said they are more comfortable with their savings versus a year ago.
This month, we asked whether Americans had increased their spending as a result of low gas prices. Gas prices have dropped since February, a time when prices usually begin their rise toward the highs of summer. This year, we’ve seen the opposite for the most part, with prices staying well below their records even as Memorial Day approaches and travel season begins.
“While rising gasoline prices are a clear headwind to the economy, recent price declines have provided little oomph to the economic recovery,” says Greg McBride, CFA, senior financial analyst at Bankrate.com.
Surprisingly, 80 percent of Americans said they have not increased their nonessential spending as a result.
In previous years, Bankrate asked the opposite — whether people were cutting back on spending due to higher gas prices. In those surveys, around 60 percent or more said they were cutting back on nonessentials due to the higher prices, a marked shift from this year’s responses.
Although we’ve managed to remain in positive territory for three solid months, each month has seen a decline from the previous month. Does this mean we’ll be seeing more negative sentiment next month, or will the upbeat feelings remain as we kick off the summer season?