Four-in-10 living paycheck to paycheck, survey finds

Allstate surveys Americans on personal financial management

NORTHBROOK, Ill. — Forty-one percent of Americans are living paycheck to paycheck, according to a new survey by Allstate Financial.

The survey, the second installment of the company's "Life Tracks" poll, also found that 8% do not earn enough each month to pay for essentials, while 50% say they have enough money left over at the end of the month after paying for essentials. Overall, 50% said their financial position was "excellent" or "good," while another 50% said theirs was "fair" or "poor." The company hired FTI Consulting to survey 1,000 adults between Dec. 15-19, 2012, with a margin of error of plus or minus 3.1% in 95 out of 100 cases.

"This second Allstate Life Tracks Poll takes the pulse of Americans to measure the health of their personal finance situations," Allstate president and CEO Don Civgin said. "Too many Americans are faced with financial challenges today that lead to an unstable future. As financial services professionals, how we bridge that gap and bring greater awareness to the financial issues people are facing, is the true test of measurable success in our industry."

In particular, men were more enthusiastic about their finances than women, with 53% of men calling their situations "excellent" or "good," compared with 47% of women. Meanwhile, 74% of single parents called their situations "fair" or "poor," but only 46% of households making $50,000 annually or less had a retirement plan in place, compared with 89% of those making $75,000 or more.

While 48% of people who had not graduated from college were living paycheck to paycheck, 32% of those who had graduated were as well.

But at the same time, 91% expressed confidence in their ability to manage their personal finances, with 42% of parents "very confident" they could pay for educational opportunities for their children, and 41% expressing the same sentiments about their ability to buy a car. Forty-seven percent of prospective home buyers said they were "very confident" about their ability to buy a new home, while 41% felt the same about being able to pay for expenses during retirement, and 82% said they thought they were doing better financially than friends, neighbors and coworkers, while 52% said they were doing better than they were when growing up.

A large majority of Americans, 82%, say they make some kind of debt-related payment each month, including 49% who pay credit card debt, 43% making mortgage payments, 36% making car payments, 17% making student loan payments and 15% with medical debts. Of the 51% expecting a tax return, 45% intend to use it to pay off debts. Sixty-five percent of Americans with credit card debt say their debt level has increased or stayed the same in the past year, while 15% say their short-term emergency savings have increased, and 14% say their long-term savings and investment activity has increased, despite 60% saying their savings have remained the same in the past year.

Forty-seven percent say they're saving less than they should be, while 40% admit they're not handling their personal finances in the way they're supposed to or may not know what to do. Fifty-nine percent say they know what they're supposed to do and generally make the right decisions in regard to personal finances, but 34% say they don't always do it, and 6% say they're unsure what to do, though 91% say personal financial management is a skill people can improve during their lifetimes.

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- 8:36 AM
Anna90 says

Unfortunately, that’s a clear picture of what we have today. Lots of people work hard to make ends meet, at the same time many people are unemployed. Living is expensive today and to cover at least essential expenses you need to be well paid at work. And quite often our expenses are much more than our income so lots of Americans borrow money to buy the necessary things. There are many financial services because today they are in high demand, there are even loans for people who live from paycheck to paycheck. It’s a sad situation because we can be confident about our future.

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