By: Daryl Tolliver
Several studies have emerged of late highlighting the concerns many Americans have over their financial well-being. Research shows that few individuals have sufficient emergency funds, while separate data shows that a large percentage of people admit to common, but impactful money mistakes. The most recent research reveals that despite losing money as a result of the payroll tax increase, workers are struggling to discipline their spending and make smart money management decisions.
Accounting Principals found that on average, working Americans are taking home $130 less per month than they did in 2012 due to the payroll tax changes, and as a result, many are facing a worsening financial situation. While 20 percent of individuals have cut back on going out at night and 19 percent have reduced the frequency with which they go out to lunch, 22 percent admitted to not cutting back on spending at all. In response, many people are being forced to pull money out of the bank in order to meet their needs.
"With many Americans feeling a pinch in their wallets and experiencing financial struggles in the past few years, it's interesting to see that saving is still not at the forefront of peoples' minds," said Jodi Chavez, senior vice president of Accounting Principals. "American workers have proved resilient at getting their careers back on track, but now it's important to be cautious of how they spend their hard earned pay. Oftentimes, the little, unmemorable spends we may make throughout the day are the ones with the biggest impact on our wallets."
Budgeting resources more important than ever
Most banks and credit unions offer a number of resources to help customers and members get their finances on track. This has never become more important, especially in light of recent customer satisfaction studies that show consumers feel more confident and optimistic when they feel their banks are working for them. This includes offering budgeting materials, financial education programs and the opportunity to meet with financial professionals one-on-one.
In addition, banks and credit unions can incorporate education into their mobile banking strategies. Many mobile rely on applications to manage budget spreadsheets on the go. They can access their existing budgets online and rely on the information to make crucial spending decisions while contemplating a purchase. Many banks have capitalized on this scenario by developing their own budgeting apps for customers. As consumers continue to seek out mobile features that enable them to manage their finances, local banks and credit unions should consider development these tools and resources on mobile platforms to appeal to a greater number of individuals.