“Perception Gap” Instills False Sense of Financial Security
COUNTRY Financial survey: Despite having a budget, Americans fall short of savings goals Tweet
Bloomington, Ill., May 15, 2012 /PRNewswire/ — A new COUNTRY Financial survey reveals a disconnect between Americans who believe they are living within their means and those who actually are. While just 9 percent say their lifestyle is more than they can afford, 21 percent say their monthly spending exceeds their income at least half of the year.
This “perception gap” may be because just 51 percent of Americans use a household budget system. Those who budget are more likely to set monthly savings goals (61 percent) than those who don’t (30 percent). However, a majority of budgeters (57 percent) and non-budgeters (54 percent) admit they meet their savings goals only half the time or less.
“Half of Americans have taken an important first step in setting up a budget. But, a budget is only helpful if it’s realistic and tailored to your situation,” says Keith Brannan, vice president of financial security planning, COUNTRY Financial. “If you’re struggling to save, try paying yourself first. Deposit a portion of your monthly income into a separate account. Don’t leave savings to chance.”
The gap between financial planning and practice is more pronounced in American families. For details and tips to help families meet their goals, watch an exclusive video interview with Brannan at www.countryfinancialsecurityindex.com.
When spending exceeds income
The 52 percent whose monthly spending exceeds their income at least a few months of the year rely on other means to make ends meet.
- Thirty-six percent dip into savings to meet financial obligations.
- Another 22 percent use credit cards.
- Just 14 percent adjust their spending next month.
“Exceeding your monthly income does happen. While savings keep you financially secure, you must replenish them,” notes Brannan. “Look for ways to adjust your spending for the next month so you are living within your means. Try to avoid using credit cards to cover excess spending. If possible, anticipate larger purchases and upcoming bills, and schedule payments around your income.”
The COUNTRY survey on living beyond your means is based on a national telephone survey of 3,000 Americans and is compiled by Rasmussen Reports, LLC (www.rasmussenreports.com), an independent research firm.
COUNTRY Financial (http://www.countryfinancial.com) serves about one million households and businesses throughout the United States. It offers a full range of financial products and services from auto, home and life insurance to retirement planning services, investment management and annuities.
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May 2012 COUNTRY Financial Data – Living Beyond Your Means