Are Americans’ financial priorities in proper order?
For Bankrate’s November Financial Security Index survey, Americans were asked to choose their top priority among these options: paying down debt, saving money, just staying current or getting caught up on all the bills, providing financial assistance to family members or friends — or something else.
Before reading any further, answer the question for yourself: What’s your financial priority?
As it turns out, nearly one-third of Americans are focused on paying monthly bills, according to our Financial Security Index. “This is consistent with the stagnant household incomes many people are seeing as well as continued escalation in food, health care and energy costs that are squeezing household buying power,” says Greg McBride, CFA, Bankrate’s senior financial analyst. “The second-most common response was paying down debt, at 23 percent, followed by saving, at 20 percent. No surprises there,” he adds.
It’s a troubling time for many Americans. Sheyna Steiner’s story, “Many Americans living paycheck to paycheck,” offers insights into the survey results, along with guidance about how to prioritize those bills when you’re struggling to make ends meet.
Financial Security Index down slightly
As for the survey results overall, the needle on Bankrate’s Financial Security Index fell slightly to 97.1 in November, from 99.2 in October. Any reading above 100 indicates positive feelings of financial security versus 12 months ago; the opposite is true for any number below 100.
The survey was taken just after the presidential election results were announced. The mood of Americans was consistently lower on all metrics of financial security, with all the talk about the fiscal cliff and the resumption of concerns about the European debt crisis appearing to have made a negative impact. Americans’ feelings on all five components of financial security — job security, savings, debt, net worth and overall financial situation all declined from the previous month. However, net worth improved when comparing survey results from a 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.
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