A Warning on American Fiscal Health
Family budgets show signs of distress
While there are lots of indicators that a significant number of Americans are struggling in an economy that only seems to be working really well for those at the top of the pyramid, a new survey adds some insight into the declining state of Americans’ fiscal health.
Jason Mikula over at Fintech Business Weekly breaks down the results of a survey from the Financial Health Network.
As Mikula notes, compared to 2021, the 2022 survey shows that 6% LESS Americans now say their monthly expenses are less than their income. Or, only 79% of Americans indicate their income is sufficient to cover monthly expenses.
Mikula highlights other key indicators:
Other indicators that deteriorated include those reporting paying all bills on time (-1% point), those with enough savings to cover three months’ expenses (-3% points), and those that felt they were on track to meet their long-term financial goals (-3% points).
The overall survey results suggest that only 31% of Americans are currently financially healthy — with just over half of Americans having enough savings to cover three months expenses (considered a good marker of sufficient funds to cover an emergency — job loss, health situation, etc.).
I’ve written some about how the use of Buy Now, Pay Later for things like groceries and healthcare is a key indicator that things are NOT OK in the economy for a large number of Americans.
It’s important to note, too, that while Buy Now, Pay Later can assist with cash flow challenges, over-reliance on this easy credit can be problematic:
One survey indicated:
32% of Buy Now Pay Later plan users have had to skip paying an essential bill such as rent, utilities or child support in order to make their payments. Even after that, 30% report that they’ve struggled to make their payments.
Unfortunately, there are no immediate signs that this situation will be improving any time soon.
On the plus, side, perhaps, the billionaire oligarchs continue to rake in billions and the stock market and its profiteers can rest (and feast) easy.
