By: Daryl Tolliver
Fewer Americans are reporting confidence in their overall financial position as concerns over rising household expenses and the possible fiscal cliff occupy their thoughts.
According to the latest Financial Security Index, all five categories - debt, savings, net worth, job security and overall financial well-being - have shown considerable decline. The index currently stands at 97.1, with scores below 100 indicating the Americans feel less confident than they did in the last 12 months. The current reading is the third lowest level recorded this year.
When it comes to job security, 18 percent admitted they feel less secure today than in past 12 months, while 17 percent said they feel more secure. Sixty-four percent said they feel the same as they did last year. Further, 39 percent are less comfortable with the amount of money they have in a savings account, while only 15 percent said they feel more comfortable. Lastly, 24 percent admitted to feeling uncomfortable about the amount of debt they carry versus 22 percent who said they are comfortable with these amounts.
Top financial priorities differ by income
The study revealed some differences in Americans' top financial priorities, which largely varied by income rather than age or gender. For example, 32 percent of respondents said staying current or getting caught up on bills was their top financial priority, a response that was largely similar across all age brackets. When income was taken into consideration, however, the study revealed that those making less than $50,000 a year were more likely to express concern about their bills.
"This is consistent with the stagnant household incomes many people are experiencing, as well as continued escalation in food, healthcare and energy costs that are squeezing households' buying power," said Greg McBride, Bankrate.com's senior financial analyst. "The second-most common response was paying down debt (23 percent), followed by saving (20 percent). No surprises there."
Higher-income earners - those making $75,000 or more each year - were more focused on saving money and paying down debt than those in lower income brackets. In fact, the study found that paying down debt and saving became more common responses as income increased.
As consumers try to prepare themselves for the possible fiscal cliff, many are switching up their tax and banking strategies in an attempt to put themselves in the best possible financial position.