A majority of Americans believe it is wise to save money right now amid growing concern about their finances, according to the results of a new survey.
In a Wells Fargo survey of about 3,400 adults and about 200 teens, most respondents said they worry more about money lately. Many even said they felt embarrassed about their financial situation, which could lead them to lie about details like their saving and spending habits.
Americans are worried about money, but trying to save
More than half of those surveyed said they were able to live within their means without worrying about making ends meet, but at the same time, only 40% said they were in good or excellent financial shape. Nearly a quarter reported being in poor financial shape, and about 1 in 3 said they spend more than they can afford each month.
However, 37% of respondents overall said they had recently put a larger share into savings and investments. 91% believe it’s a good time to save money, and they’re right about that: Annual percentage returns on savings products have skyrocketed over the past two years thanks to Federal Reserve rate hikes that have brought inflation down .
Only 14% of respondents said it is a good time to borrow. With annual percentage rates (APRs) on credit cards topping 22% and mortgage rates around 7%, we can’t say we blame them.
By raising interest rates, the Fed effectively makes it more expensive to borrow money and save it significantly cheaper. Case in point: Some high-yield savings accounts now offer APYs of 5% or more, and the best CDs offer rates of 4.70% and higher over terms of six months to two years.
The Federal Reserve is expected to start cutting interest rates this year now that inflation is cooling, although experts don’t expect them to fall much. For now, no one knows when – and to what extent – rates will decline.
Lies, damned lies and statistics
The findings suggest that Americans’ lack of confidence in their financial situation may lead them to distort the truth. In the survey, nearly a third of U.S. adults admitted to lying about how much they spend, and 28% reported lying about their savings.
Teens were even more likely to say they had been dishonest about financial matters. Half of 14- to 17-year-olds surveyed said they had lied about their spending, while 42 percent said they had lied about their savings.
Overall, more than a quarter of those surveyed said they had lied about how much debt they had, and a similar share had lied about their income. Most respondents said money is a personal matter, with 65% saying they are reluctant to talk about their savings and 62% saying the same about their income.
In fact, Americans are so awkward when it comes to talking about money, that they consider finances more difficult to discuss than death, politics, religion, health and taxes.
“I think the root cause of people’s reluctance to talk about money is that it reveals so much more about who they really are, and that can make them uncomfortable, to the point that they’re willing to lie about aspects of their financial lives,” Michael Lo said Liersch, Wells Fargo’s head of consulting and planning, in a press release.
But there is some good news. While they may not feel completely confident at the moment, about 60% of people said they were satisfied with their “money story” – or how their finances influence their life narrative – so far, and 73% he said he feels optimistic about where he is. direct.
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