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Consumers take more proactive approach to long-term planning.

In response to the recession, consumers have regrouped and are doing the best they can to rebuild their financial foundations.

That's one of the findings from "Trends in Consumer Financial Issues Q1 2010" from research firm Financial Finesse Inc. Consumers are showing signs of improved cash management and financial responsibility. Reactive, event-driven calls, such as "how do I make ends meet," are being replaced with proactive, goal-driven calls, such as "how do I create a spending plan."

Financial Finesse's research is compiled by tracking calls through its financial service helpline, which is available to more than 500,000 employees from more than 300 organizations.

For the past few quarters, the firm said it has watched as employees' financial situations have continued to slowly improve. Debt related calls continue to hover around the 20% level, with more questions about how to reduce debt as opposed to calls about what to do if a person is falling behind on debt. Budgeting and savings calls returned to their first quarter 2009 levels, a sign that consumers may be more confident in how well they are managing their cash, according to Financial Finesse.

The biggest indication of improvement came in the form of increased calls about retirement planning. For the first quarter, retirement planning calls reached 19%, compared to 13% for the first quarter of 2009. So far this year, there has been a nearly a 50% increase in interest in retirement planning over this time last year, the data showed.
Change from Q1 2009 to Q1 2010

Retirement Planning 6%
Real Estate -2%
Investing -5%

Note: Table made from bar graph.

Breakdown of Financial Calls from Employees Q1 2010

Credit Management 4%
Others 5%
Taxes 20%
Retirement Planning 19%
Data Management 19%
Budgeting and Servicing 12%
Investing 10%
Real Estate 7%
Education Planning 4%

Note: Table made from pie chart.

2010 Breakdown by Age

Age: Under 30 30-44 45-54 55-64 65 or Over

I have a handle on my cash 64.9% 56.5% 66.2% 75.3% 57.1%
flow so I spend less than
I make each month.

I regularly pay off my 44.1% 36.0% 45.3% 57.1% 42.9%
credit card balances in
full.

I am uncomfortable with 21.6% 32.1% 39.3% 41.6% 28.6%
the amount of
(non-mortgage) debt I
have.

I have an emergency fund 37.8% 34.8% 48.3% 54.6% 71.4%
to pay bills for a few
months if I lose my job.

I have a general knowledge 41.4% 47.8% 55.7% 44.2% 42.9%
of stocks, bonds and
mutual funds.

I pay my bills on time 81.1% 75.1% 82.6% 92.2% >95.0%
each month.

I feel confident that my 18.9% 28.5% 30.9% 31.2% 42.9%
investments are allocated
appropriately.

I contribute to my 67.6% 85.3% 91.5% 88.3% 85.7%
retirement plan, such as a
401(k), 457 or 403(b) at
work.

I know I am on target to 18.9% 12.3% 8.0% 20.8% 14.3%
replace at least 80% of my
income in retirement

Source for all charts: Financial Finesse, Inc.

Note: Table made from bar graph.

Calls regarding long-term financial goals from 2009-Q1 2010 *

 Short term Long term

Q1 2009 55% 45%
Q2 2009 63% 37%
Q3 2009 57% 43%
Q4 2009 52% 48%
Q1 2010 55% 45%

Note: Table made from bar graph.

Response to Online Financial Planning Questionnaire

Q1 2010 Overall Response

 Overall

I have a handle on my cash flow so I spend less than I make 60%
each month.

I regularly pay off my credit card balances in full. 42%

I am uncomfortable with the amount of (non-mortgage) debt I 32%
have.

I have an emergency fund to pay bills for a few months if I 41%
lose my job.

I have a general knowledge of stocks, bonds and mutual funds. 48%

I pay my bills on time each month. 77%

I feel confident that my investments are allocated 28%
appropriately.

I contribute to my retirement plan, such as a 401(k), 457 or 82%
403(b), at work.

I know I am on target to replace at least 80% of my income in 13%
retirement.

Note: Table made from bar graph.


--msamaad@cutimes.com
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Title Annotation:FOCUS REPORT / HR / Investments / Insurance
Publication:Credit Union Times
Date:Jul 21, 2010
Words:722
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