Spring cleaning season could give Americans a fresh start on financial security
Spring is in full swing and many Americans have begun taking time to organize closets, clean up cobwebs and dust in dark corners – but “spring cleaning” shouldn’t just be limited to your home. For about two thirds of Americans (67 percent) who confess their finances need cleaning, spring is also the time to take a fresh look at their personal finances, according to the latest COUNTRY Financial Security Index®.
This spring, COUNTRY Financial® found that the top personal finance projects for Americans, in order, include:
• cleaning up credit card debt
• getting spending habits in check
• establishing a plan to build up emergency fund savings
“Spring can be the perfect time to clean out your closets, but it’s also an ideal time to consider organizing and refining your financial plan to set yourself up for success,” said Joe Buhrmann, manager of financial security at COUNTRY Financial. “Depending on your financial goals, there are a variety of simple steps you can take to make a difference.”
Millennials must master the basics
Millennials say spending habits, student loan debt and credit card debt are the biggest financial pain points they need to address. Taking basic steps to clean up your finances – such as creating and maintaining a budget as well as keeping tabs on your credit score – can be simple moves to make during this season of growth.
Currently, only 57 percent of millennials follow a budget, according to the survey, and one out of every three millennials has either never checked their credit report or does not know how to do so. For many in this generation, getting in the habit of tracking spending and monitoring debt can help overcome some of the most prominent financial hurdles.
“One of the most important steps millennials can take is to create – and stick to – a household budget that will help them reach their future goals,” said Buhrmann. “No matter the amount of your assets, it’s important to monitor and protect what you have.”
In the age of online banking and investing, it’s important to protect your financial information online as well. Despite being known for their tech savvy, nearly half (47 percent) of millennials admit to using the same or a similar password for their online financial accounts as they do on other internet sites, opening themselves up to hackers and identity theft.
Debt weighs heaviest on Generation X
According to the COUNTRY Financial Security Index, just 10 percent of Gen Xers are debt free, compared to the 18 percent of the general population and the 24 percent of those 65 and older who report carrying no debts.
For middle-aged Americans, credit card debt becomes the biggest financial woe. Twenty-three percent of Gen Xers believe their credit card debt needs to be cleaned up, which is five percent higher than the general population.
As a result of the focus on credit card debt, members of Generation X keep close tabs on their credit report. Americans aged 35-49 are the most likely to have checked their credit report within the last six months (51%).
Boomers and beyond: Approaching and living in retirement
As older Americans build their nest egg and pay down debts to prepare for retirement, financial priorities shift once again. However, even as baby boomers and the oldest Americans approach and live in retirement, just half (51 percent) of those over age 50 know exactly how much debt they owe.
Living on a budget is paramount during the final stretch before retirement and the transition to living on a fixed income for the rest of their lives. Even more surprising, as this group is focused on stretching savings and investments to last through their golden years, less than half of Americans, (42 percent) over age 50 have an established budget they follow every month.
“In different stages of your financial life, there will be different priorities and pain points,” said Buhrmann. “Taking time this spring to adjust the weak spots in your financial plan can help right the course toward reaching your financial goals.”