Feeling Financially Fit, Americans Say They’re Ready to Save

Paying down debt is top financial priority for American workers, followed by saving for retirement, according to a Principal Financial survey.

On balance, American workers are feeling more financially fit going into this holiday season, and a majority plan to give back during the holidays, the Principal Financial Group found in its “Financial Well-Being Index: American Workers.”  

The survey data shows a decidedly optimistic bend when compared with the same survey last spring, when almost half of workers polled said they were stressed about their finances. In the latest findings, nearly half of workers (46%) consider themselves financially healthy, up 18% from last quarter.

With their perceived financial health on an upswing, a third of workers say paying down debt is their top money management priority, while 24% say saving for retirement is their top goal. A majority of workers (65%) plan to make charitable donations or do volunteer work.

While workers’ economic outlook remains mixed, overall sentiment has improved. Down from 57% last year, just 47% of workers view the U.S. economy as unhealthy, while 26% view the economy as healthy, up from 17% last year.

Three in five workers (61%) surveyed plan on spending the same amount they did last holiday season. Fifty-three percent say they will spend $500 or less on the holidays this year. Half of workers (51%) also indicate they plan on setting a budget this holiday season as a means to better manage their money, while three in ten (29%) say they save for holiday gifts throughout the year.

As the financial outlook remains positive, Americans seem to be stressing less over the financial burden this holiday season. Two in five workers (41%, up from 33% in 2013) indicated that spending will put no stress on their financial situation. Half of workers (51%) believe that holiday spending will put a moderate amount of stress on their financial situation, down from 58% last year. Only nine percent of workers surveyed believe this holiday season will put a great deal of stress on their financial situation.

’This year, I promise to…’

As workers look to 2015, financial resolutions remain strong. Top resolutions for the coming year include: paying off credit card debt (28%); saving a set amount of money on a monthly basis (24%); and reducing monthly spending (20%).

However, 35% said they do not plan on making a financial resolution for 2015 (up from 28% last year). Many of workers’ top concerns from last year’s survey noticeably decreased in this year’s study. Health care costs (52%, down 10%), food prices (45%, down 13% from last year) and economic uncertainty (42%, down 21% from last year) all showed significant declines as top concerns for workers.

“Coming into the holiday season, it’s encouraging to see workers are feeling better about their financial health,” says Luke Vandermillen, vice president with The Principal. “We’re especially happy to see increased confidence resulting in paying off debts as well as saving for retirement. However, the fact that Americans are looking to give back to those less fortunate is certainly the most heart-warming finding from this quarter’s survey.”

The Principal Financial surveyed more than 1,110 American workers working at small to mid-sized businesses across geographies and demographics. The Index is part of a series of quarterly studies commissioned by The Principal Knowledge Center that examines the financial well-being of American workers, business owners and adviser opinions and practice management. The survey was conducted online by Harris Poll in October and November.

“The Principal Financial Well-Being Index: American Workers” can be downloaded here.