Adults Turn to Savings to Cope with Rising Costs, Report Spending Nearly $617 to Cover Everyday Expenses

As inflation remains elevated and the cost of everyday goods continues to rise, New York Life’s Wealth Watch Survey revealed that a majority (62%) of adults still report overall confidence in their ability to meet their financial goals, down from an average of 69% when compared to the beginning of the year. When asked to describe how they feel about their finances, 30% of Americans are “uncertain” and 29% are “anxious,” but nearly 1 in 3 (28%) are “hopeful” – findings that align to an extent with sentiments at the start of the year, when 28% of adults were “uncertain,” 22% were “anxious” and nearly 2 in 5 (39%) were “hopeful.”

“The financial picture for many Americans has changed significantly since the start of the year, and we’re seeing the positive expectations many Americans held about their finances heading into 2022 start to fade,” said Aaron Ball, Senior Vice President, Head of Insurance Solutions, Service, and Marketing, New York Life. “Our research found that macroeconomic factors, including inflation (65%), healthcare costs (34%), and the national economic recovery (32%) are the factors that Americans report as being most impactful to their personal sense of financial security. Three-quarters of those surveyed report that inflation has impacted either short- or long-term financial strategies, and nearly 9 in 10 adults (89%) are concerned about a potential economic recession in the U.S.”

Americans continue to prioritize short-term financial goals

At the midpoint of the year, top financial concerns have shifted from long-range priorities to nearer-term ones – a change from just a few months ago, when a majority (65%) of those surveyed were prioritizing their long-term financial goals. Americans now report that their current concerns are paying for daily expenses like groceries and gas (39%), monthly bills (36%), and personal financial emergencies (24%). Respondents also reported drawing an average $616.73 from their savings to cover higher everyday costs.

• The top financial goals on which respondents made continued progress this month include developing and maintaining a financial budget (54%), evening out spending month to month (46%), and eliminating debt (44%).
• To cut back on spending, nearly half (45%) of Americans are reducing dining out and ordering from restaurants, reducing travel and vacations (39%), and reducing event attendance (37%).
• Nearly half (47%) of adults said they have made some progress recently on saving for retirement, but 32% say they have made no progress on this financial goal.

“Americans are certainly factoring the economic environment into their short-term financial strategies by cutting back on discretionary spending. Fortunately, we are still seeing many adults maintain current financial habits over the last couple of months, including investing in the stock market (30%) and spending on home renovations (25%),” continued Ball.

Sentiments and priorities differ by demographic

• Younger generations are less confident today than they were six months ago that they will be able to retire at their desired age (Gen Zers: 64% vs. 75%; Millennials: 62% vs. 74%).
• The ability to afford a home is a top financial concern for Gen Zers (22%) and Millennials (21%).
• Mental health is a concern for 36% of Gen Zers and 32% of Millennials, vs. 23% of all adults.
• Gen Zers (82%), Millennials (67%), and men (70%) are more likely to be confident that their retirement savings will last the rest of their life, compared to other demographic groups.
• Baby Boomers (66%) and men (68%) are more confident in their ability to meet their financial goals compared to other demographics.
• 58% of parents sought financial advice in the past month compared to 42% of non-parents.

Despite declining confidence, finances remain relatively strong and most people have reported a recent financial bright spot

• More than half (59%) of adults have experienced recent financial bright spots, including paying off debt (19%), going on or booking a vacation (18%), and contributing to savings or emergency funds (17%).
• Though confidence has declined since January, a majority (64%) of adults expect their retirement savings to last their whole lives.

“Members of all generations are facing difficult financial headwinds and, as a result, we’re seeing an increased interest in financial guidance – especially among Gen Zers and Millennials. In fact, more than half of respondents in these groups (65% of Gen Zers and 56% of Millennials) have utilized financial advice in the last month,” said Ball. “Regardless of the economic environment, the partnership of a trusted financial professional is critical to ensuring short- and long-term financial goals can be achieved.”

ABOUT WEALTH WATCH

Wealth Watch is a recurring survey from New York Life that will track Americans’ financial goals, progress toward those goals, and feelings about their ability to secure their financial futures, identifying key themes and trends that are emerging about topics like retirement planning, the role of protection-oriented solutions, and the importance of financial guidance.

SURVEY METHODOLOGY

This poll was conducted between June 23 and June 24, 2022 among a national sample of 2,210 adults. The interviews were conducted online, and the data were weighted to approximate a target sample of adults based on gender, educational attainment, age, race, and region. Results from the full survey have a margin of error of plus or minus 2 percentage points.

ABOUT NEW YORK LIFE

New York Life Insurance Company (www.newyorklife.com), a Fortune 100 company founded in 1845, is the largest mutual life insurance company in the United States¹ and one of the largest life insurers in the world. Headquartered in New York City, New York Life’s family of companies offers life insurance, retirement income, investments, and long-term care insurance. New York Life has the highest financial strength ratings currently awarded to any U.S. life insurer from all four of the major credit rating agencies².

¹ Based on revenue as reported by “Fortune 500 ranked within Industries, Insurance: Life, Health (Mutual),” Fortune magazine, 5/23/2022. For methodology, please see https://fortune.com/fortune500/.

² Individual independent rating agency commentary as of 6/22/2022: A.M. Best (A++), Fitch (AAA), Moody’s Investors Service (Aaa), Standard & Poor’s (AA+).

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