Research shows paying day to day bills and expenses beats saving for retirement as top financial goal


NeighborWorks survey finds more than 60 percent of adults don’t have a formal budget

Washington, DC – (RealEstateRama) — Despite a growing economy, when asked to choose their most important financial goal, more people cite paying day-to-day bills than other choices, including saving for retirement, according to a national survey. Twenty-six percent of people cited paying bills as their top financial priority, compared to 21 percent who placed saving for retirement as their number one financial goal. The results are from the third annual consumer financial capability household survey from NeighborWorks America.

More than one third (35 percent) of adults earning less than $40,000 and 49 percent of those earning less than $20,000 said that paying bills and every day expenses was their number one priority.

Lower-income adults are less likely to say that saving for retirement is a top financial goalThe survey found lower income adults were even less likely to say that saving for retirement was a top goal. Specifically, just five percent of adults earning less than $20,000 annually, and 7 percent of adults earning less than $40,000 per year put retirement savings first. However, 33 percent of people earning more than $100,000 per year placed retirement at the top of their list of financial goals.

While slightly more than one in five adults in the United States rank retirement as their number one financial priority, nearly half as many African-Americans or just 11 percent of that group, put saving for retirement as their primary financial goal, and only 13 percent of Hispanics list retirement savings as their top financial objective. Thirty percent of Asians and 25 percent of whites said that saving for retirement was their number one financial goal.

Who has a budget?

Whether used to plan for retirement or as a roadmap for shorter term goals, a budget is an excellent financial tool. However, the NeighborWorks survey found that the majority of Americans across income, gender and ethnic groups don’t have a formal budget that they refer to regularly. The survey found just 39 percent of adults have a formal budget. Hispanics (47 percent) were much more likely to say they had a budget. There was no statistical difference across other ethnic, income and gender groups.

College graduates were more likely (52 percent) to have a formal budget compared to respondents with a high school diploma or less (29 percent) or some college (33 percent).

Meanwhile, 53 percent of those who have student loan debt had a budget, compared to 42 percent who had student debt but paid it off, and 35 percent of people who never had student debt.

Higher income Americans are more likely to have a formal budget than other groups. Forty-nine percent of adults with income greater than $100,000 had a budget, compared with 31 percent who earn $20,000 or less, 41 percent who earn less than $40,000, 39 percent earning between $40,000 and $59,000, and 39 percent of people earning between $60,000 and $100,000.

*The telephone survey was conducted of a nationally representative sample of 1,000 U.S. adults. The survey has a total cumulative sampling error of +/- 3.1% at the 95% confidence level.  Conducted by Finn Partners, March 10-14, 2016.

About NeighborWorks America
For more than 35 years, NeighborWorks America, a national, nonpartisan nonprofit, has created opportunities for people to improve their lives and strengthen their communities by providing access to homeownership and to safe and affordable rental housing. In the last five years, NeighborWorks organizations have generated more than $24.5 billion in reinvestment in these communities. NeighborWorks America is the nation’s leading trainer of community development and affordable housing professionals.

Doug Robinson


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