By Nathalie Voit
According to recent survey findings from Gallup, Americans’ views of their personal finances have deteriorated over the past year.
Overall, U.S. adults are more pessimistic about their financial situation this year than last year. Forty-six percent of Americans rate their current finances as “good” or “excellent,” down from 57% in 2021, the lowest rating since 2015. Additionally, 38% of Americans rate their current financial situation as “only fair,” while 16% classify it as “poor.” Just 9% of Americans rated their personal finances as “poor” last year.
More Americans are pessimistic about their financial situation in 2022. Nearly half of those surveyed (48%) say their finances are getting worse this year, while 37% say they are improving. According to Gallup, the statistics are about the same as during the beginning of the COVID-19 pandemic in April 2020. The numbers are also similar to figures from the Great Recession.
The bleak personal finance ratings are consistent across all income groups. Each major income group reported a decrease of between eight and 14 percentage points in positive evaluations of their finances. Those in the middle-income group reported the greatest decline in financial well-being.
A record number of Americans are blaming inflation for their financial woes. According to Gallup, nearly one in three survey participants (32%) cited the high cost of living as the most important economic challenge facing their family. The number mentioning inflation was just 8% one year ago and is nearly double the previous high of 18% in 2008.
After inflation, Americans cited a lack of money or low wages (11%), energy costs (10%), costs of owning or renting a home (8%), healthcare costs (7%), and high debt (7%).
Overall, inflation is the top financial concern among all income groups but was cited more frequently by residents from upper-income households (37%) than middle-income (32%) or lower-income households (27%).
The survey also found that high gas prices take a toll on everyday Americans. Fifty-two percent of those surveyed say gas prices have become a financial burden for their family. Around one in seven (14%) say high fuel costs have caused “severe hardship” for their families. Financial stress due to gas prices was more pronounced among lower-income households. Seventy-percent of lower-income Americans say gas prices are causing either severe or moderate financial stress compared to 51% of middle-income Americans and 35% of upper-income Americans.
“Nearly one-third of Americans name inflation as the most important financial problem for their family, and half say higher gas prices are causing them financial hardship. These issues appear to be taking a toll on Americans’ financial outlook, with fewer Americans rating their situation positively than did a year ago and more saying it is getting worse.
Current personal finance ratings are similar to, if not worse than, what they were amid widespread economic shutdowns two years ago at this time. The fact that more expect gas price increases to be temporary, perhaps attributing the price hikes to the Russia-Ukraine war or, more generally, to past gas prices increases eventually receding, may be keeping Americans’ assessments of their finances from being even worse than they are.”