Americans Slightly More Optimistic About Their Financial Situations

GALLUP NEWS SERVICE

PRINCETON, NJ -- There has been a slight increase this month in Americans' optimism about their personal financial situations. This marks a recovery from October, when personal financial optimism was as negative as it had been in the last two years. Forty-six percent of Americans now say that their financial situation is getting better, while 32% say it is getting worse. Last month, just 40% said their finances were getting better and almost as many, 36%, said they were getting worse.

Is Your Financial Situation Getting Better or Getting Worse?

Americans were much more optimistic in late 2001 and early 2002, when up to six out of 10 said their personal financial situations were getting better. Optimism fell significantly this summer, and as noted, reached a low point last month.

Measures of American optimism about personal financial situations track at a higher (that is, more positive) level than does American optimism about the economy more generally. This month, for example, 37% of Americans think the U.S. economy is getting better, compared with the 46% of Americans who feel that way about their personal finances.

Opinion of National and Personal Economic Situations: A Comparison

The trends in these two measures show the same pattern -- optimism dropped this summer, reaching a low level in October, and recovered slightly this month.

Americans' Ratings of Their Current Economic Situation

A second indication of the public's financial condition comes from a question that asks Americans to focus just on their current situation, and to rate it as either excellent, good, only fair, or poor.

About half of the American public now rates their financial situation as excellent or good, while another third rate it "only fair," and 15% rate it poor.

How would you rate your financial situation today – as excellent, good, only fair, or poor?

As can be seen from the graph below, there has been relatively little change on this measure over time. The most positive reading since August 2001 was in December of last year (56% rated their personal finances as excellent or good), but that was only nine points higher than the low point, 47%, that came in August of this year.

Rating of Current Financial Situation

As was the case with the economic expectations data, the public's personal ratings are considerably more positive than their ratings of the national economy. Using the same scale, only 28% of Americans in early November rated national economic conditions as excellent or good, while 45% rated conditions as only fair, and 26% rated them poor.

Big Differences in Financial Satisfaction by Sub-group

It is not surprising to find that there are very significant differences among sub-groups of the American population in terms of how they rate their personal finances.

• Income and education are the most highly correlated with satisfaction with one's financial situation. Eight out of 10 Americans who make $75,000 or more a year rate their finances as excellent or good, compared to only 20% of those making less than $20,000 a year.
• College graduates are more satisfied than those with lower levels of education, not a surprising finding given the generally high correlation of income with education.
• Those Americans in the oldest age category (65+) are less satisfied with their financial situations than are those who are younger.
• Non-whites are less satisfied than whites.
• Americans living in rural areas are less satisfied with their financial situations than are those living in urban and suburban situations. Those living in the West are somewhat less satisfied financially than those living in other regions of the country.

Survey Methods

The results reported here are based on telephone interviews with a randomly selected sample of 1,001 adults across the 48 contiguous states, aged 18+, conducted Nov. 11-14. For results based on the total sample of national adults, one can say with 95% confidence that the margin of sampling error is +/- 3 percentage points. 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.