Americans Remain Down About Their Financial Situations

by Jeffrey M. Jones

Slightly more likely to say their finances are getting better

PRINCETON, NJ -- Americans' evaluations of their current financial situations remain low, and the 41% who describe their personal financial situations as excellent or good is the lowest Gallup has measured in the past decade.

2001-2010 Selected Trend: How Would You Rate Your Financial Situation Today -- as Excellent, Good, Only Fair, or Poor?

Gallup first asked Americans to rate their financial situations on the excellent/good/only fair/poor scale in August 2001, and has asked the question at least annually since then. From 2001 to 2007, a majority of Americans evaluated their finances positively, but in each of the last three years, less than 50% have.

The April 6-9 poll also asked Americans whether their financial situations are getting better or getting worse. Roughly the same percentage now believes their finances are improving (39%) as declining (40%). That is a slightly more positive assessment than Gallup has found in the past two years, when Americans were more pessimistic than optimistic. Prior to 2008, Americans were typically more likely to say their finances were getting better than to say they were getting worse.

2001-2010 Selected Trend: Right Now, Do You Think That Your Financial Situation as a Whole Is Getting Better or Getting Worse?

Predictably, higher-income Americans are much more upbeat about their current finances, with 65% rating these as excellent or good, compared with 41% of those in middle-income households and 21% of those in lower-income households.

Middle- and upper-income Americans are equally positive about the direction in which their finances are headed, while lower-income Americans are more pessimistic.

Ratings of Personal Finances, by Household Income Level

While there is a relationship between income and political party affiliation, with higher-income Americans more likely to identify as Republicans and lower-income Americans more likely to affiliate with the Democratic Party, personal finance ratings by party do not parallel the ratings by household income.

Republicans and Democrats rate their current finances similarly; independents are less positive.

More surprising is that Democrats are much more optimistic about the current course of their finances, with 50% saying they are getting better, compared with just 34% of Republicans and 35% of independents.

Ratings of Personal Finances, by Political Party

This suggests that there is a political component to how Americans rate their finances, with Democrats now more likely to be optimistic given that their party is in control of the White House. Democrats were also more optimistic last year (37% getting better and 38% getting worse, compared with 29% and 52%, respectively, among Republicans), though not to the same extent as this year. Republicans were more optimistic than Democrats about their finances in each year of the Bush administration.

Bottom Line

Americans became more pessimistic about their finances as the economy began to sour in 2008. Their ratings of their current financial situations have never been worse than they are today, and though their financial outlook is slightly better than it was in 2008 and 2009, it remains below the historical norm. The recovery in this latter measure is partly the result of an improved financial outlook among Democrats.

Survey Methods

Results are based on telephone interviews with a random sample of 1,020 national adults, aged 18 and older, conducted April 8-11, 2010. For results based on the total sample of national adults, one can say with 95% confidence that the maximum margin of sampling error is ±4 percentage points.

Interviews are conducted with respondents on land-line telephones (for respondents with a land-line telephone) and cellular phones (for respondents who are cell-phone only).

In addition to sampling error, question wording and practical difficulties in conducting surveys can introduce error or bias into the findings of public opinion polls.

Full Trend: How Would You Rate Your Financial Situation Today -- as Excellent, Good, Only Fair, or Poor?

Full Trend: Right Now, Do You Think That Your Financial Situation as a Whole Is Getting Better or Getting Worse?

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