DES MOINES, Iowa--(BUSINESS WIRE)--Workers remain divided about the future of the U.S. economy as the New Year approaches but are increasingly satisfied with their own personal financial situations, according to new research from the Principal Financial Well-Being IndexSM: American Workers.
Forty percent of workers expect the economy to worsen in 2014, which is up significantly from last year’s 27 percent. Another 32 percent think the economy will improve in the year ahead, but that number is down from the 43 percent reported last year.
Meanwhile, 42 percent of employees (up from 33 percent last quarter) are extremely happy with their current financial well-being. That number soars to 60 percent among employees who work with a financial professional.
“Following the recent peak in economic optimism at this time last year, workers have returned to a more cautious outlook as they approach 2014,” said Luke Vandermillen, vice president of retirement and investor services at The Principal®. “As they prepare to ring in the New Year, it’s encouraging to see American workers take action by focusing on their own personal finances instead of what they can’t control—the economy. It’s no surprise those working with a financial professional are the happiest, likely because they have a plan and feel more in control.”
The Principal Financial Well-Being Index: American Workers surveys employees at small and mid-sized businesses with 10 to 1,000 workers. It is part of a series on the financial well-being of Americans released quarterly by the Principal Financial Group® and conducted online by Harris Interactive®.
Forty-two percent of employees saw improvement in their finances in 2013. Millennial workers, who are early on in their careers and financial lives, fared the best this year—58 percent feel better off financially now than they did at the beginning of 2013.
Workers are also increasingly seizing control of their personal financial lives. Fifty-seven percent of employees, up from 49 percent last quarter, say they usually feel in control of their personal financial situation. Nearly half (49 percent) of employees believe they are making good progress toward achieving their long-term financial goals, up from 43 percent at the end of last year.
Financial blunders and budget busters
As workers reflect on the past year, saving too little and taking on debt top their list of financial missteps. One in five (21 percent) report not saving enough as their top financial blunder in 2013, followed by accumulating credit card debt (9 percent, which is down from 13 percent in 4Q 2012) and taking on more debt (8 percent).
Food was the biggest budget buster this year. When asked where they blew their budget in 2013, dining out (22 percent) and food/groceries (21 percent) topped the list. Gas came in close behind at 20 percent.
While more than a quarter (28 percent) of workers do not intend to make any financial New Year’s resolutions this year, many will work to address their mistakes of the past year:
- 34 percent resolve to save a set amount each month
- 28 percent plan to pay off credit card debt
- 23 percent resolve to reduce monthly spending
Holiday purse strings stay tight
For about two-thirds (67 percent) of employees, holiday spending will put some amount of stress on their personal financial situation. Purse strings remain tight for many workers this year:
- More than a third (37 percent), up from 30 percent in 4Q 2012, say they will be spending less this year
- Driven by the economy, employees will be buying gifts for fewer people (38 percent), spending less per gift (37 percent) or traveling less (26 percent) this holiday season
- The majority of employees plan to spend $500 or less on the holidays
“While personal financial confidence is on the rise, many workers are being frugal this holiday season. With smart financial resolutions for the year ahead and only 10 percent of employees planning to take on credit card debt to finance holiday spending, it looks like many will kick off the New Year on strong financial footing,” Vandermillen said.
View the full survey results and download the infographic at www.principal.com/wellbeing. For more news and insights from The Principal, connect with us on Twitter at http://twitter.com/ThePrincipal and The Principal Blog.
This Principal Financial Well-Being IndexSM: American Workers was conducted online within the United States by Harris Interactive on behalf of the Principal Financial Group® October 25-November 5, 2013 among 1,106 employees. This is one in a series of quarterly studies to identify and track changes in the workplace of small and mid-sized (growing) businesses. The first Principal Financial Well-Being IndexSM survey was conducted in the United States in 2000. No estimates of theoretical sampling error can be calculated. For complete survey methodology, visit www.principal.com/wellbeing.
About Harris Interactive
Harris Interactive is one of the world’s leading market research firms, leveraging research, technology and business acumen to transform relevant insight into actionable foresight. Known widely for The Harris Poll®, Harris offers proprietary solutions in the areas of market and customer insight, corporate brand and reputation strategy and marketing, advertising, public relations and communications research across a wide range of industries. Additionally, Harris has a portfolio of multi-client offerings that complement our custom solutions while maximizing a client’s research investment. Serving clients worldwide through our North American and European offices, Harris specializes in delivering research solutions that help our clients stay ahead of what’s next. For more information, visit www.harrisinteractive.com.
About the Principal Financial Group
The Principal Financial Group® (The Principal®)1 is a global investment management leader offering retirement services, insurance solutions and asset management. The Principal offers businesses, individuals and institutional clients a wide range of financial products and services, including retirement, asset management and insurance through its diverse family of financial services companies. Founded in 1879 and a member of the FORTUNE 500®, the Principal Financial Group has $466.2 billion in assets under management2 and serves some 19.0 million customers worldwide from offices in Asia, Australia, Europe, Latin America and the United States. Principal Financial Group, Inc. is traded on the New York Stock Exchange under the ticker symbol PFG. For more information, visit www.principal.com.
1 “The Principal Financial Group” and “The Principal” are registered service marks of Principal Financial Services, Inc., a member of the Principal Financial Group.
2 As of Sept. 30, 2013.