Amid inflation, financial literacy is more crucial than ever

Between inflation and an international conflict, Americans’ financial behavior will likely be affected for months to come, making financial literacy even more important.

According to Primerica’s Middle-Income Financial Security Monitor Q1 2022, middle-income households remain concerned about inflation, with the majority indicating they are considering lifestyle changes to reduce spending. In fact, 66% say inflation already has or is likely to impact a major purchasing decision and many people are considering lifestyle changes due to rising costs.

Additionally, 67% say their income is below the cost of living and only 22% think they will be better off financially in a year. When asked to rate their ability to save for the future, 66% of respondents said “not very good” or “bad”, which represents a four percent increase in December alone (62 %).

Concern over the invasion of Ukraine is also a top concern, with 61% saying they expect it to have at least some impact on their behavior and financial decisions over the next few months. month. Yet, given the current economic environment, many respondents also indicated that they feel anxious about tracking their financial health and don’t know where to start.

Additionally, while a majority (85%) of respondents believe that people should start planning for retirement before they turn 30, many are not following their own advice. Nearly a third (30%) say they don’t contribute to a savings account, follow a budget, contribute to an investment account, or make a financial budget every month. Anxiety (26%) and lack of time (18%) are among the biggest challenges people cite when keeping track of their finances.

“As we face the highest levels of inflation in 40 years, it is critically important that middle-income families understand how to budget, manage debt, save for the future and protect their income,” notes Glenn Williams, CEO of Primerica. “These priorities compete for limited financial resources, making the need for career guidance more important than ever.”

Additional results show that the top items people plan to cut back on include restaurant/takeout meals (57%), keeping technology current instead of upgrading it (44%) and budgeting for purchases. groceries or reduced groceries (37%). Many also consider delaying a major purchase, with 40% saying they have already done so and 26% considering it.

Meanwhile, there was a slight drop in the number of respondents who said they are at least somewhat likely to change jobs over the next year, from 33% of respondents in the December survey to the company at 26% in the current poll. Those most likely to change jobs are adults ages 18-34 (35%) and Midwesterners (34%).

The Monitor is a quarterly national survey aimed at tracking the financial health of people with annual household incomes between $30,000 and $100,000. The current results are based on an online survey conducted by Change Research from March 4-8, 2022, of 980 US adults over the age of 18.