Thanks to improved spending habits many households are also feeling more optimistic about their personal finances
For the first time in nearly two years, inflation is no longer the top concern among middle-income Americans, who are reflecting increasing optimism about their personal finances after beginning the year with more doubt.
Primerica’s most recent quarterly survey found that for the first time since 2021, health ranked as the No. 1 concern (35%) among middle-income households, topping inflation (32%), which dropped five percentage points from the previous survey. Fears about a recession, which didn’t make the list of top 5 concerns, dropped four percentage points to 21%.
Despite a rocky start to the year and persistent high inflation, middle-income families expressed more optimism for the year ahead than in previous surveys, highlighting how positive financial habits are helping them successfully navigate the current economy.
Credit card debt as a whole is on the rise across the country and Americans’ combined debt is expected to hit $1 trillion for the first time in the coming months. Yet Primerica’s most recent survey found the number of middle-income households who said their credit card debt increased in the past three months fell four percentage points to about one-third (33%). Additionally, the percentage of respondents who said they have no credit card debt increased to nearly one-quarter (24%), up two percentage points from the end of the year.
“As the nation heads further into 2023, middle-income Americans are showing increasing confidence in their personal finances and are adapting to the current economic climate,” said Glenn J. Williams, CEO of Primerica. “While concerns about inflation are ebbing, higher costs continue to place strains on budgets causing families to prioritize more than ever. Our survey results highlight that financial security is key to navigating the ever-changing economy and that guidance and expertise can help guide households to better financial security.”
Many middle-income families have also significantly cut back on spending, with about two-fifths (40%) of respondents saying they spent less money in the past year, an 8-percentage point increase from this time last year. Plus, more than a quarter (28%) said they added to savings accounts.
These households are also planning to make the most of their tax refunds by putting them to work to achieve their financial goals. Primerica’s survey found that a majority (60%) expect to receive a tax refund this year, although more than one-third (35%) expect it to be less than last year. Those expecting a refund plan to use the money to pay bills (37%), pay down debt (34%) and add to their savings accounts (33%).
“As middle-income families file their taxes this month, these survey results show that they’re already planning to use their refunds to build financial security, putting themselves in a strong position as they work to achieve their financial goals,” said Amy Crews Cutts, Ph.D., CBE®, economic consultant to Primerica.
