Personal Finance

New York Life | August 17, 2022

• According to the latest New York Life Wealth Watch survey, inflation continues to be top of mind for most Americans (65%), followed by health care costs (34%) and the national economic recovery (32%).
• To combat the impacts of inflation, Americans are reducing short-term spending and considering the guidance of a financial professional.
• According to Wealth Watch respondents, financial products that offer protection and reliability are more important now compared to last year.

Inflation continues to drive concerns about the immediate financial future for many Americans – with 65% of people reporting being concerned about the impact of inflation, according to the latest installment of the New York Life Wealth Watch survey. Beyond inflation, Americans report concern about healthcare costs (34%) and the national economic recovery (32%).

In the midst of an uncertain economic climate, many are adjusting their spending habits and report being interested in seeking professional financial guidance as they explore the products and strategies that will help safeguard their financial futures.

Americans are enacting more conservative spending habits

The current financial environment has prompted many Americans to rethink their financial strategies and spending habits. New York Life found that Americans are pivoting their focus to short-term financial goals as they navigate the current inflationary environment, and Wealth Watch survey respondents reported making particular progress on developing and maintaining a financial budget (54%), evening out month-to-month spending (46%) and eliminating debt (44%).

In order to meet these goals and to help manage their budgets, survey respondents reported cutting back on dining out / ordering from restaurants (45%), traveling / vacations (39%) and attending events (37%).

At the same time they are adjusting short-term spending, Americans are still keeping long-term goals, like saving for retirement, top-of-mind. In fact, 47% of adults still report making progress against their goal of saving for retirement.

Economic anxiety prompts interest in financial guidance

In the face of economic concerns and decreased purchasing power, Americans indicated a renewed interest in seeking financial guidance. Around half of adults (46%) utilized financial advice this past month, with younger generations taking the lead in this trend. Gen Zers and Millennials reported utilizing financial advice in the past month (65% and 56% respectively) at higher rates than older generations.

Despite this growing appetite for financial advice, just 23% of adults say they are currently working with a financial professional. Among those who reported working with a financial professional, the benefits are clear—more than two-fifths of adults reported feeling calm afterwards (42%), and nearly a third reported feelings of happiness (32%) and relief (32%).

Hand-in-hand with the guidance of a trusted professional are solutions that can support Americans’ progress toward meeting financial goals – and these are also top of mind for Wealth Watch respondents. While two-fifths of adults (42%) agree that they don’t know what financial products would be best for their current financial situation, 37% of adults report thinking about life insurance more often these days. When asked about the benefits that financial products can provide, more than half of adults are interested in products that can provide growth (53%), reliability (51%), and protection (46%). Further, half of adults report that financial products that provide protection (50%) and reliability (50%) are more important now compared to last year.

“Many people envision what financial solutions can help them achieve, and often it’s the protection of their families’ financial futures or the assurance that their assets are safe even in a down market,” said Aaron Ball, Senior Vice President, Head of Insurance Solutions, Service and Marketing at New York Life. “Yet when it comes to which products can help address their unique situation, there’s no one size fits all solution. That’s where the guidance of a trusted professional can make a difference. And the need for professional guidance can become even more critical amid volatile or uncertain market conditions.”

To learn more about how New York Life financial professionals can help with your financial strategy, contact a local professional here.

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