2019 Modern Wealth Survey Results Are In. How Do You Stack Up?
Dear Readers: Every year about this time, Schwab conducts a survey that takes a close look at how Americans view wealth and manage their money. I've long been fascinated by the complicated relationship that we have with money and how that impacts our ability to make smart financial decisions, so to me, this survey is a gold mine of information. Comprised of questions ranging from "What most influences your spending decisions?" to "What would you do with a windfall of $1 million?" the survey reveals both the good and not-so-good ways we deal with our money. And I think it provides food for thought for everyone.
The Saver/Spender Conundrum
One particularly intriguing statistic to me is that 59% of the 1,000 respondents in the survey consider themselves to be savers -- despite the fact that many live paycheck to paycheck. That's a clear disconnect, and one that deserves some attention.
On the other hand, it's encouraging to note that 65% say they're willing to make sacrifices today to save money for the future. At the same time, a significant number of Americans are struggling to save, with nearly 44% carrying a credit card balance and only 38% having an emergency fund. But the desire is there, and that's a start.
Influences on Spending Patterns
Of course, financial challenges depend, to a large extent, on your salary level and the cost of living in your area. And that will definitely determine your ability to save. But this year's survey identified a fairly constant and increasingly concerning influence on today's spending versus saving decisions -- social media.
For the first time, the survey sought to explore the pressures social media places on us to "keep up with the Joneses." It's certainly not a new concept, but social media channels confront us daily with what other people are experiencing and enjoying. It all looks pretty special -- and tempts us to do the same, whether or not we can afford it.
The financial pitfalls of social media pressure are powerful, and I plan to dive deeper into this issue in a future column. But topline, the survey reveals how focusing on the way other people spend their money can lead us to overspend ourselves. It's not the spending itself that's the problem. It's the constant pull to spend beyond our means that can impact long-term financial stability. Social media seems to beg the question, "If everyone else can spend that much, why can't I?" Imagine if we could turn that around and ask, "If everyone else can save that much, why can't I?"
The Positive Influence of Planners
One statistic that seems pretty constant in the survey each year is that planners demonstrate better money and investing habits. That may not seem surprising, but it's interesting to focus on nonetheless and hopefully might motivate more people to have a financial plan. For instance, in terms of everyday money management -- from saving to staying on top of expenses and debt to having an emergency fund -- people who have a written financial plan are ahead of the game. In fact, more than 60% of those with a written plan feel financially stable compared to only about a third of people without a plan.