Financial Security Index reveals diligence

Financial Security Index

At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict , this post may contain references to products from our partners. Here’s an explanation for

Are Americans internalizing the “happy holidays” message? Last month, it didn’t seem to be the case. But in December, Bankrate’s Financial Security Index shows improvement in every component from job security, savings, debt and net worth to Americans’ overall financial situation.

The biggest improvement was in job security. Fewer people feel insecure in their jobs this month. The number of people feeling less secure in their jobs than they did one year ago fell to 18 percent from 28 percent in November. Meanwhile, 64 percent of Americans now feel the same level of job security, the highest recorded since polling began in December 2010.

Despite the improvement, the Financial Security Index, at 95.8, is still below 100, indicating consumers overall are experiencing less financial security than a year ago.

“2011 was not a year of progress in terms of consumers’ financial security,” says Greg McBride, CFA, senior financial analyst for “Each component — job security, savings, debt, net worth and overall financial situation — ended 2011 lower than where it was in January.”

In January, the Financial Security Index stood at 98.5. Coming in at 95.8 in December, it’s at the highest level since June’s 97.8.

Below are some highlights from December’s survey, which asked individuals how they felt about the different aspects of their finances compared to 12 months ago.

  • Job security: Those younger than 30 feel more secure than other age groups, while those older than 50 feel less secure than younger generations.
  • Savings: Those younger than 30 feel more comfortable with the amount of money they have in savings than other age groups, while those ages 50 to 64 as well as retirees feel less comfortable.
  • Debt: Those with household incomes of $75,000 a year or more are more comfortable with their debt level today than others, while parents and households with income less than $30,000 are, understandably, less comfortable than anyone else.
  • Net worth: Households with incomes of $75,000 a year or more are most likely to report higher net worth than one year ago, while those with household incomes less than $30,000 are most likely to report lower net worth.
  • Overall financial situation: Americans younger than 30 are most likely to report a better overall financial situation. Meanwhile, those between ages 50 and 64, households with incomes of less than $30,000 and the unemployed are the groups most likely to report their overall financial situation as worse today than one year ago.

Each month, Bankrate also asks a “wild card” question related to personal finances. This month, we asked Americans how often, if ever, they thoroughly review their financial situation. Sheyna Steiner’s story, “Americans review personal finances often,” reveals consumers may in fact be obsessive-compulsive about checking their finances — that is, if they are to be believed.