You’ve probably heard the old saying, “More money, more problems.” Well, to some degree, this adage is accurate, but the saying does tend to underestimate how difficult it really is to be broke. Perhaps a better expression would be, “more money, different problems.” At least that’s what the results of a recent Gallup Survey indicate.
The survey was on the top financial concerns people are facing these days, and it broke respondents up into three income groups: Those who earn under $30,000 annually, those who earn between $30,000 and $74,999 annually, and those who earn over $75,000 annually.
The responses across these different income groups portray vastly different financial priorities. For instance, those in the under $30,000 per year income group said their most important financial concern was having a “lack of money/cash flow,” while the highest income group (over $75,000 annually) said their most important financial concern was whether or not they had enough retirement savings. The lower earners’ responses express more of a concern for their financial present, and the higher earners appear to be placing more emphasis on their financial futures.
Middle class Americans — who for argument’s sake, we’ll define as the survey’s middle income group (the $35,000 to $74,999 group) — said that health care costs were their number one financial concern. Second to health care costs was not having “enough money to pay down debt,” followed by a “lack of money/cash flow.”
On the other hand, some money problems that middle earners reported facing on past years’ surveys seem to be less prevalent in this year’s results. There were also some financial problems that were more common in the higher or lower income groups, but middle class Americans didn’t seem too concerned about them. Here are some of the financial issues that middle class Americans don’t seem too concerned about these days.
1. Unemployment/job loss
With the unemployment rate at 5.6% as of December 2014, it has reached its pre-recession levels. Of the middle earners who participated in the Gallup survey, only 3% of survey respondents said that unemployment or job loss was their most important financial concern. In fact, it is less of a concern for middle earners than it is for both the higher income groups (5%) and lower income groups (8%).
Overall, Americans in general seem to be feeling more confident in this area. In late 2011, 10% of survey respondents (at all income levels) said that unemployment or job loss was their biggest financial worry, and as recent as 2014, 8% of people still had these concerns. The 2015 survey found that overall, only 5% (at all income levels) place unemployment or job loss high on their list of financial fears.
2. High energy and transportation prices
With gas prices going down to an average of around $2.05, we’re paying the lowest prices that we’ve paid in several years. These low prices probably contributed to the Gallup survey results, where only 2% of middle earners said that energy costs were a top financial concern for them, and only 2% said transportation and commuting costs were a major financial problem.
In 2012, the picture looked much different, as 11% of survey respondents said that oil, energy, and gas prices were at the top of their list of financial concerns.
Before we go getting too comfortable with today’s reasonable gas prices, however, we have to make sure they will actually last. And, the likelihood of gas permanently remaining at $2 per gallon is pretty slim.
Many of us have heard the reports of $5 per gallon gas coming by the end of this decade. U.S. Energy Information Administration (EIA) projections say that gas should remain reasonably priced (in the $3 and under range) for the remainder of 2015 and through 2016. So for now, we should be able to ride without going broke, at least for a little while.
3. Controlling spending
The majority of Americans know what it feels like to struggle financially. Some people blame the way in which our system is set up, some blame the economy, and others blame individuals for mismanaging their finances and spending more than they earn.
Well, Gallup’s survey indicates that people may have just learned a few lessons from the recession, as only 1% of survey respondents said that “controlling their spending” was their most important financial concern, and most of this 1% were from the highest income group. Less than 0.5% of middle earners said that overspending was at the top of their list of financial problems.
Overall, Americans at all income levels seem to be pretty optimistic about the financial health of the economy. Financial concerns, like the state of the economy, interest rates, stock market investments, and social security were not at the top of the priorities lists for any of the income groups.
The one across-the-board concern that people from all levels of income appear to be sharing right now is the cost of health care, which ranked in the top three financial concerns for all income groups.
What is your most important financial concern these days? What aspects of your finances are under control?