As culture compels us to examine our behavior with each turn of the new year, 2022 begs some pertinent financial questions. What are people’s biggest financial hang-ups in a year when economic turmoil is rampant, health is at risk, and entirely new forms of money (i.e., cryptocurrencies) are being invented seemingly every day? In the face of ostensibly impossible questions, a CouponFollow survey has answers.
CouponFollow surveyed more than 1,100 people across the U.S. to learn people’s financial strengths and weaknesses.
Apart from overall finances, spending was the biggest area Americans wanted to improve upon. The nation’s overspending problem is evidently mirrored by the habitual spending of its own citizens. In recent years, it’s thought that the average American will overspend by more than $7,000, often taking on additional debt in the holiday season. Forty-five percent also mentioned wanting to improve their financial knowledge in general apart from – or perhaps in addition to – the desire to stop overspending.
Spending on nonessentials was the primary category where respondents wanted to cut back. More than half considered this a desired financial improvement. By comparison, only 31% wanted to increase their earnings. This is likely the result of what’s known as the “wealth effect,” wherein a person tends to spend more as they make more, meaning they’re often not building wealth even as their salary increases. Fortunately, Americans are evidently aware that cutting back on nonessential spending is of primary importance.
Weaknesses And Financial Worries
Respondents were also asked to dig deep and honestly self-evaluate their biggest financial weaknesses.
Unfortunately, the most common weak area (spending) was also the most detrimental one. Although 35% of people admitted to spending problems, the vast majority of them also rated this same habit as the single most harmful financial weakness. Considering they suffer from these weaknesses, it’s clear respondents were speaking from experience. Fortunately, 80% of respondents considered themselves fully capable of improving in this area. This optimism is encouraging, but it’s important to note there is often a psychological component behind overspending that may require addressing beyond simply deciding to stop.
Financial knowledge was also a self-reported weakness for a third of respondents, though very few considered this a major barrier to financial wellness. The money going out was a more concerning barrier for most than the money coming in. Spending and saving habits will ultimately be the name of the financial game for most rather than figuring out ways to increase annual income.
Barriers To Improvement
While respondents appeared ready for change, they did frequently mention some barriers to financial wellness.
Thirty-nine percent blamed “life circumstances in general” as their primary barrier for financial improvement. While a person can choose to empathize or criticize with this statistic, it’s clear that many Americans feel there truly is something life-size holding them back from financial freedom. With so many Americans drowning in debt and facing rising costs of living, it’s easy to understand how they might feel right now. Another 28% said they felt confused and unsure of how to move forward. And nearly a quarter simply acknowledged how much they enjoyed their bad habits, the pure fun of which made it hard to stop – good news for them is studies show we may need both self-control and time to self-indulge in order to be happy.
But practice makes perfect. Nearly 70% had already begun putting a consistent, concerted effort into addressing their spending problems. Sixty-five percent said they were making consistent efforts to save (which is a goal for many Americans this year); 63% were working on their debt and credit issues; and 43% were even investing time into increasing their financial knowledge. Investing was a concerted effort for just 37%, which most financial experts would recommend for any and all financial situations.
Methodology and Limitations
For this study, CouponFollow surveyed 1,141 respondents using SurveyMonkey. Among those respondents, 534 were men, and 607 were women. Additionally, 259 respondents were aged 18 to 29 years old; 305 respondents were 30 to 44; 335 respondents were 45 to 60; and 242 respondents were over 60 years old.