Investopedia — The financial crisis known as the Great Recession took a serious toll on the monetary health of many Americans. The average household lost approximately one-third of its net worth as a result of the financial collapse.
Nearly a decade later the economy has made enormous strides toward recovery, and a new study from Northwestern Mutual suggests that Americans are cautiously optimistic about the future. Forty-three percent of U.S. adults say the economy will be better in 2017 than the previous year, and 72% of Americans say they feel financially secure.
What About the Next Financial Crisis?
That same study found that 67% of U.S. adults believe that another financial crisis could occur at some point. That raises the question of whether Americans are doing more to protect their finances based on their experiences from the last recession.
Research suggests that many adults may be financially unprepared for another economic upset. (For more, see Is a Recession Coming? Check These Indicators.)
A Lack of Attention to Long-Term Planning
Just 50% of respondents to the Northwestern Mutual survey said that they need a financial plan that considers up and down cycles in the market. That’s a drop from the 57% who said the same the year before. At the same time only 41% said their long-term savings strategy had a mix of high- and low-risk investments, a decline of 3% from the previous year.
Overall, the personal savings rate stood at 5.6% as of February 2017. That’s a slight increase over January’s number, but it’s still down from the 6% savings rate reported in February 2016. In terms of setting aside money for emergencies, the majority of Americans are still coming up short, according to a recent Bankrate survey. In that survey three out of five consumers reported having an unexpected expense in the past year, but only 41% of Americans say they have emergency savings to deal with out-of-the-blue expenses.
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