NEW YORK, Feb. 25, 2019
/PRNewswire/ -- Freedom from the stress of money is top of
mind for people when dreaming about their future (59 percent), but
many don't have ongoing savings habits that will prepare them for
long-term financial success or protect against a potential
financial crisis in the future, according to new research from
PurePoint® Financial, a hybrid digital bank and division
of MUFG Union Bank, N.A.
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According to PurePoint Financial's second "State of Savings in
America" survey, savings balances are down 35 percent and 88
percent of Americans are concerned about another economic downturn,
and for good reason; 83 percent of those impacted by the Great
Recession are still recovering. Economists around the world are
predicting another market slump, but the research found that 80
percent of Americans are not very confident they could survive
another recession or market downturn in the near future. The
reason: 6 in 10 of those who are not confident are still living
paycheck to paycheck.
While nearly half (44 percent) of respondents impacted by the
Great Recession have cited keeping a closer eye on their finances
since the recession, 1 in 7 have admitted they haven't changed
their savings behaviors since being impacted.
"Not having to worry about money underpins a brighter future for
so many of our respondents, but we're seeing a risky trend
throughout the country of prioritizing convenience and instant
gratification," said Pierre Habis,
president of PurePoint Financial. "America has some of the hardest
working professionals in the world and their money should be
working hard for them, too. Our goal at PurePoint is to help people
take control of their savings so they can focus on the things that
are most important in life and rest assured they have a secure,
brighter tomorrow."
Confidence up, habits down
Respondents report feeling
less anxious about the job market, political environment and other
external factors than in 2017. However, consumers are saving less,
have worse savings habits and nearly half don't feel proud of how
much they've saved. In fact, fewer Americans are disciplined,
habitual savers. Forty-one percent of respondents are saving via
direct deposit, down 6 percentage points from 2017. Even more so,
crash diet saving is a popular tactic, with half of millennials
categorizing themselves as aggressive short-term savers.
Surprisingly, more consumers are taking savings into their own
hands, with 16 percent of respondents reporting hiding cash around
their homes, compared to 12 percent in 2017. Admittingly, 73
percent of respondents are not actively looking for the best rates
or places to save the money they are putting aside, possibly
leaving money on the table. As a result, respondents reported a
decline in median savings balances, down to $1,500 in 2018 compared to $2,300 in 2017.
According to the Federal Reserve, there is more than
$9 trillion sitting in accounts
earning less than .09 basis pts.1 PurePoint experts
recommend saving at least 10 percent of your annual income in a
high-yield savings account with at least 2 percent interest
rate.
"Our survey found that 1 in 3 people in the U.S. don't feel in
control of their finances and half are too embarrassed to talk
about their savings with their friends," continued Habis. "We
understand how important financial security is to all of us and
that saving may seem daunting, but it just takes minor adjustments,
such as creating financial goals, setting aside whatever you can
manage from each paycheck or searching for a better interest rate
for your savings account."
Creating habits in fitness and finances
When ranking
the top three most important factors in their future, respondents
reported having good health (76 percent), financial savings (73
percent) and a relationship/family (68 percent) as the top three
responses. That said, respondents noted that saving is their
most rewarding activity, even more than losing weight (79 percent
vs. 47 percent). But there's more work to be done with crash-diet
savers; 2 in 5 respondents consider themselves as aggressive
short-term savers, for things like weddings and trips, but they're
not consistently saving in between.
"You only live once": Consumers are living for today
Despite concern about their future financial health, at least one
quarter of consumers admit to prioritizing convenience over saving.
The quick rise of on-demand applications indicates this number will
quickly increase over time. The research found that 2 in 5
respondents would spend four times as much on transportation to
save 20 minutes and 1 in 3 would choose to take $1,000 now rather than waiting a year for
$3,000; this number was significantly
higher with millennials at 43 percent.
Additional findings include:
- While financial savings and having a relationship/family are
within the top three important factors of their future, among those
in a relationship:
-
- 3 in 10 people are embarrassed to talk about their savings with
their significant others.
- Less than half know how much their significant other
saves.
- More than half feel they're cheating on their significant other
if they make a big purchase without consulting them first.
America Saves Week
During America Saves Week
(Feb. 25 – March 2, 2019) PurePoint has teamed up with local
schools and non-profit organizations to provide complimentary
financial literacy courses, helping improve the financial health of
Americans. The sessions will be hosted by PurePoint Financial
saving professionals throughout the week in Chicago, Dallas, Houston, Miami, New York
City and Tampa.
The 2018 PurePoint State of Savings in America survey is an
online survey among 6,000 adults in the U.S. (aged 18+),
commissioned by PurePoint Financial and conducted by independent
research firm Edelman Intelligence. The survey examined current
behaviors, drivers, and barriers to saving among adults in the U.S.
Data was collected December 15, 2018
– January 2, 2019, with a margin of
error of +/- 1.27%. 2018 was the second wave of the survey,
building off of the benchmark wave that was conducted in
July/August 2017.
About PurePoint Financial
PurePoint Financial is a
division of MUFG Union Bank, N.A., a proud member of the Mitsubishi
UFJ Financial Group (MUFG), one of the world's leading financial
groups. As the next evolution in the financial services industry,
PurePoint® Financial is the modern way to save − online,
over the phone or in person. PurePoint offers market-leading CD and
savings rates, no monthly fees and all the flexibility and
convenience of online banking with 24/7 access from your computer,
tablet or mobile devices. PurePoint also offers Financial Centers
at select locations staffed by knowledgeable team members who are
committed to delivering exceptional experience.
About MUFG Union Bank, N.A.
As of September 30,
2018, MUFG Union Bank, N.A. operated 354 branches, consisting
primarily of retail banking branches in the West Coast states,
along with commercial branches in Texas, Illinois, New
York, and Georgia, as well
as 22 PurePoint ® Financial Centers. We provide a
wide spectrum of corporate, commercial, and retail banking and
wealth management solutions to meet the needs of customers.
We also offer an extensive portfolio of value-added solutions for
customers, including investment banking, personal and corporate
trust, global custody, transaction banking, capital markets, and
other services. With assets of $124.0
billion, as of September 30,
2018, MUFG Union Bank has strong capital reserves, credit
ratings and capital ratios relative to peer banks. MUFG Union
Bank is a proud member of the Mitsubishi UFJ Financial Group (NYSE:
MUFG), one of the world's largest financial organizations with
total assets of approximately ¥306.4 trillion (JPY) or $2.7 trillion (USD)2, as of
September 30, 2018. The corporate
headquarters (principal executive office) for MUFG Americas
Holdings Corporation, which is the financial holding company, and
MUFG Union Bank, is in New York
City. The main banking office of MUFG Union Bank is in
San Francisco, California.
1 Board of Governors of the Federal Reserve
System (US), Total Savings Deposits at all Depository Institutions
[SAVINGS], retrieved from FRED, Federal Reserve Bank of
St. Louis;
https://fred.stlouisfed.org/series/SAVINGS, February 12, 2019.
Federal Deposit Insurance Corporation, National Rate on
Non-Jumbo Deposits (less than $100,000): Savings [SAVNRNJ], retrieved from
FRED, Federal Reserve Bank of St.
Louis; https://fred.stlouisfed.org/series/SAVNRNJ,
February 12, 2019.
2 Exchange rate of 1
USD=¥113.6 (JPY) as of September 28,
2018
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