The current economy is making it hard for millions of Americans who are changing their money management behavior to make ends meet.
This includes reducing their spending (67%), delaying life goals (45%), and dipping into savings and investment (32%) to find the extra money they need to pay their bills, according to the inaugural Wells Fargo Money Study.
Even with making these changes, 62% of respondents say they have little money left over once their financial obligations are met.
While 58% said that they are able to live within their means, 33% are spending more than they can afford each month, just 40% said their finances are in good or great shape (with 23% believing them to in poor shape), and 44% are not comfortable with their debt burden.
Savings and investments remain key goals with 37% reporting that they have put more into these including 69% of young affluent respondents (under 40 years old with investable assets of $500K to $10M.)
More than six in ten poll participants said that now is a good time to take advantage of new financial opportunities and nine in ten believe it’s a good time to save.
Three out of five (60%) say they are happy with their money story so far, while two out of five (40%) are unhappy. But almost three quarters are happy with where it’s headed.
The study also found that many Americans are embarrassed, judged, and overly focussed on money with six in ten feeling they need a ‘mental reset’ regarding their finances with 43% admitting to focusing on what they don’t have financially rather than a prosperity mindset focussing on what they do have (57%).
More than half (57%) saying they sometimes judge themselves based on their money or lack of money, and half (50%) sometimes feel judged by others.
“Resetting your money story can feel overwhelming because it can seem like you need to make large changes all at once,” Liersch said. “The fact is that it’s small, incremental changes – like being more intentional about how you spend just on one thing, or saving even seemingly small dollar amounts like $50 or $100 per month – that tend to make sustainable positive steps toward accomplishing your goals. By making regular progress, it can inspire you to be less reluctant to discuss money because you want to know and share more about what leads to financial success.”
Many respondents said they do not like to talk about finances with 82% saying it’s a private topic, 65% not happy to talk about their savings and 62% wanting their earnings to remain private.
“I believe that the root cause of people being reluctant to discuss money is that it reveals more about who they truly are and that can make them uncomfortable –so much so that they are willing to lie about aspects of their financial life,” added Liersch. “I’d suggest that these feelings are part of human nature and encourage everyone to embrace their respective money stories.”
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