Americans (Falsely?) Secure about Their Finances

I was recently sent the information below from a PR firm:

Americans are optimistic about their personal level of financial security; however they are concerned about debt and protecting surviving family members from financial loss.  This according to the COUNTRY Financial Security Index, launched today, which registered an inaugural reading of 70.2 in February.   

The COUNTRY Index surveys 3,000 Americans every other month and records the relative financial security of respondents on a scale of 0-100 with 100 indicating the highest level of security. 

The COUNTRY Financial Security Index revealed:

• Half (51 percent) rate their financial security as excellent or good and 67 percent expect to have the resources needed to send children in their care to college.
  
  
• While 84 percent are confident their house, car and possessions are adequately insured, one-third (32 percent) worry that their family will not be able to live comfortably if they died or were disabled. 

• Forty-one percent of Americans have not been able to set aside money for savings and investments in the past few months and one in five are not confident they will be able to pay all their debts as they come due.

Americans are confident...but they worry:

• Half rate their overall level of financial security as excellent or good, yet 41 percent say they have not been able to set aside money for savings and investments recently.
  
  
• 84 percent are confident their house, car and possessions are adequately insured, yet 1/3 are not confident their family will be able to live comfortably if they died or were disabled.
  
  
• 67 percent expect to have the resources needed to send children in their care to college, yet 1 in 5 Americans do not feel confident they will be able to pay all their debts as they come due.

“In the midst of increasing debt, a negative savings rate and concerns about the viability of Social Security, the COUNTRY Index presents a somewhat encouraging picture,” says Keith Brannan, director of the Financial Security Office at COUNTRY.  “It shows the nation as a whole doesn’t feel it is in dire financial security straits, but there is room for improvement.”

I've worked in marketing for almost 20 years and have taught personal finances for 15 years or so and all I can say is that there's a BIG difference between what people say they'll do or say where they are financially and what they actually do and where they actually are financially. If you look at the many statistics I share on a regular basis, things aren't nearly this rosy. So either people are overly optimistic, the survey is being filled out by a group that mostly has its financial act together, or I'm missing it big-time.

I'd bet that #1 is the answer.

Comments

[Christian Gross]

No, you are not wrong. Here in Europe I recently deposited an American cheque. My bank has always let me do this in the past without question. This time though they asked if I knew the person who was sending the cheque. I asked regarding the oddity of this question. Answer, recently a very significant number of American cheques have been bouncing and costing the bank too much money and time. Thus they now prefer money transfers. I think this says quite a bit no? Optimist that they have the money, but then when it comes to cashing the cheque not quite there...

[Adam]

When it comes to finances, I'm relatively optimistic except when it comes to health care. Sure we have insurance now, and do whatever is necessary to keep it, the problem is when something happens in which you may loose it. Keeping insurance under COBRA is extremely expensive, and finding private coverage if you have a pre-existing condition is comparable to playing pool with a woodchuck and a turtle. What worries me though, is the fact medical expenses are so variable. You never know when they will arise, and you never know how much they are going to be. They could just put a small dent in your emergency fund, or they could wipe that out, put you in debt for life, and make it nearly impossible to ever get insurance again.