Fewer Americans delaying life events for financial reasons

By Samiha Khanna

Fewer Americans reported putting off major life decisions, such as buying a house or retiring, compared with three years ago. According to a survey of 1,014 U.S. adults conducted on behalf of the AICPA by Harris Poll, 35% of Americans said they had delayed making a major life decision within the last year for financial reasons. In a similar survey conducted in 2015, 51% of Americans reported delaying major life decisions.

Fewer respondents also said they had delayed certain life events for financial reasons than did so in 2015:

  • 14% said they delayed buying a home in the past year, down from 22% in 2015.
  • 13% said they put off enrolling in higher education, down from 24%.
  • 12% said they delayed a medical procedure, down from 19%.
  • 10% said they delayed retirement, down from 18%.
  • 7% said they delayed having children, down from 13%.
  • 6% said they had delayed marriage, down from 12%.

“The economy is robust, and unemployment rates are lower than we’ve seen them in several years,” said Susan A. Speirs, CPA, CGMA, a member of the AICPA’s National CPA Financial Literacy Commission. “Many surveys indicate that Americans across all demographic groups are saving more and feel more confident in their finances.”

Sixty percent of the respondents who said they had delayed a decision for financial reasons said they did so due to a lack of savings, the same percentage as in 2015.

Anemic savings accounts are a common financial woe, said Speirs.

“We see statistics all the time that indicate the majority of Americans have less than $1,000 saved for an emergency,” Speirs said. “Because we’re experiencing a robust economy and low unemployment rates, now is the time to create responsible spending plans that will steer us into safety should we experience an unexpected drop or crisis.”

Other reasons respondents chose to delay major decisions included:

  • Concerns about the economy (38% chose this reason vs. 50% in 2015).
  • Medical bills (34% vs. 29%).
  • Difficulty paying bills other than a mortgage (29% vs. 39%).
  • Paying down credit card debt (27% vs. 28%).
  • Caring for elderly parents or other relatives (25% vs. 29%).
  • Concerns about losing a job (22% vs. 27%).
  • Difficulty making mortgage payments (17% vs. 25%).

Compared with 2015, though, the number of Americans who said they have made positive changes to their financial habits has actually declined.

Three years ago, 85% of respondents said they had made positive changes to their financial behavior since the recession, such as following a monthly budget, using credit cards less often, and increasing contributions to savings, emergency funds, and retirement plans.

In 2018, 68% percent of respondents said they had taken steps to improve their financial habits. Compared with 2015, fewer respondents said they had:

  • Followed a monthly budget (39% vs. 58% in 2015).
  • Started or increased savings (36% vs. 44%).
  • Spent less money on credit cards (30% vs. 50%).
  • Started or added to an emergency fund (30% vs. 35%).
  • Started saving for retirement or increased retirement savings (28% vs. 32%).

Now is a good time for consumers to funnel extra cash toward securing their financial futures, starting with smart budgeting, Speirs said.

“As an individual moves forward or accomplishes a major purchase or financial decision, the need for a spending plan becomes a way of life,” she said. “A spending plan facilitated with SMART (specific, measurable, achievable, relevant, and time bound) goals will put you in the driver’s seat as you get to design how those goals will be accomplished while living within your means.”

Samiha Khanna is a freelance writer based in Durham, N.C. To comment on this article or to suggest an idea for another article, contact Ken Tysiac, a JofA editorial director, at Kenneth.Tysiac@aicpa-cima.com.

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