The Financial State of Americans: 2019 vs. 2009
Americans feel more financially secure but more risk averse today than 10 years ago, according to Northwestern Mutual.
May 17, 2019 at 03:29 PM
3 minute read
Life InsuranceThe original version of this story was published on Law.com
Americans are feeling more financially secure today compared to 10 years ago when the economy was still suffering from the Great Recession, but twice as many have become more risk averse with their finances, according to a new report from Northwestern Mutual.
The report, dubbed the Planning & Progress Study, compares the survey responses of Americans 25 and older in 2009 to those 35 and older today with the results weighted to census targets for education, age and gender, race and ethnicity, geographic region and household income. The findings are based on interviews with close to 1,300 people, but they are not the same individuals interviewed 10 years ago.
Seventy-one percent of interviewees feel financially secure today versus 47% in 2009. Even more (74%) said they're carrying less debt and more frugal with their spending, but slightly more than one-third have become less comfortable taking financial risks and taking risks with their health care coverage.
"In many ways, 20009 feels like ancient history, but the imprint that period left is still visible in the data we collected in 2019," said Emily Holbrook, director of planning at Northwestern Mutual, in a statement.
"The people we surveyed today are more financially stable than they were 10 years ago … presumably more advanced in their careers and have witnessed the longest bull run in the history of the stock market. And yet they've become more cautious and diligent about their finances. … We suspect there's some financial trauma mixed in, too."
Sixty-six percent of interviewees have set specific goals for the next five to 10 years versus 57% in 2009.
Despite the economic recovery since the Great Recession and long-term bull market, Americans are less optimistic today about the future. Although more than half (54%) believe the "American Dream" is still attainable for most, that's down from 58% in 2009 in the throes of the recession, and 73% believe a person can accomplish anything they put their mind to versus 82% in 2009.
On whether the country is generally headed in the right direction, 36% thought so in 2019 versus 27% in 2009, but 44% said it was headed in the wrong direction in 2019 versus 40% in 2009. On a personal level, two-thirds believed they would attain what they want in life, the same as 10 years ago.
"There's a real mix of optimism and pessimism in these numbers," said Holbrook. "People continue to believe in themselves, but they're more cynical about the broader questions such as the direction of the country and the attainability of the American Dream."
But their priorities in life haven't changed much over the past 10 years.
The top three priorities among Americans continued to be spending quality time with family, being healthy and having a good relationship with their spouse or partner — all three categories endorsed by about 50% of interviewees. Close to half (48%) rated being financially prepared for the future their No. 4 priority versus No. 6 in 2009.
"There is no big shift in what success looks like," said Holbrook.
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