Financial services provider Primerica has released its Middle-Income Financial Security Monitor, a national survey that measured financial sentiment changes for mid-earning families in the United States during the first quarter of 2023 and it demonstrates that inflation is slipping as a concern, at least relative to wellness.
Middle-income Americans on the whole are slightly more optimistic about their personal finances this quarter, at 20%, compared to in the fourth quarter of 2022, at 15%, but the majority, at 53%, remain pessimistic about the economy as a whole, saying it will be worse a year from now. Not only that but 72% say their income is falling behind the cost of living.
With tax season underway, 60% of survey respondents said they expect to receive a tax refund this year, although 35% noted that they expect it to be less than last year, Primerica maintained. Respondents expecting a refund plan to use the money to pay bills, at 37%, pay down debt, at 34%, and add to their savings accounts, at 33%.
As to personal costs, 40% of respondents said they spent less money in the past year, an eight percentage point increase from this time last year, and 28% have added to savings accounts. On the other side of the ledger, 36% of respondents dipped into their personal or retirement savings. The percentage of respondents who say they have an emergency fund of $1,000 or more has remained relatively even over the past year, at 58%, while 42% do not have an emergency fund that would cover an expense of $1,000 or more, and 49% have tapped their set-aside funds in the past year.
Many respondents are considering new opportunities, as 25% said they are at least somewhat likely to change jobs this year, up five percentage points from the previous survey. Respondents said they continue to rely on credit cards for everyday purchases, including for gas, at 53%, retail purchases, at 52%, and groceries, at 48%, even as 36% report using their credit cards more often in the past year, up 9 percentage points from March 2022. Still, fewer households say their credit card debt has increased in the past three months, dropping four percentage points to 33% of respondents. In addition, the number of respondents who say they have no credit card debt has increased to 24%, up two percentage points from the 2022 fourth quarter.
“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 Williams, CEO of Primerica, in announcing the survey results. “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. When the Federal Reserve Bank of New York issues its Q1 Household Debt and Credit report in May, many expect credit card debt will hit $1 trillion for the first time. Our data suggests the middle market’s reliance on credit cards may be slowing, but households continue to rely on credit cards for everyday purchases. More than ever, they need a plan to help them get out of debt.”
