Financial Security Index takes negative turn

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Americans aren’t feeling as keen about their household finances, judging from a dip in Bankrate’s Financial Security Index into negative territory after six months of upbeat readings.

For the first time since February, the index has fallen to a level below 100 — terrain that indicates deteriorating financial security compared to a year ago. A reading above 100 means improving financial security.

The index slipped 1 point in September, to 99.5. It’s down more than 3 points from the all-time high of 102.7, reached in June of this year. Financial Security Index
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.

Consumers’ uneasiness about their debt, net worth and overall financial situation have all increased this month, with feelings about debt taking the biggest swing, says Greg McBride, CFA, senior financial analyst at Twenty-one percent now feel less comfortable with their debt than they did a year ago, versus 17 percent who feel more comfortable. In August, things were more even.

“Savings remains a drag on financial security,” McBride notes, “with those feeling less comfortable with their savings now, compared to one year ago, outnumbering those who are more comfortable by better than 2-to-1.” He adds that when you break down the survey results into age groups, income brackets or education levels, no subset of the population is feeling better about their savings these days.

The monthly survey that Bankrate uses to compile the Financial Security Index also asks about job security. There, McBride sees a bright spot: Just roughly 1 out of 8 employed Americans — 12 percent — feels less secure at work, versus a year ago. That’s a new low for the survey, which began in December 2010.

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