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National Survey: Middle-Income Families Are Feeling Increasingly Negative About Personal Finances Despite an Uptick in Purchasing Power


Primerica, Inc. (NYSE: PRI), a leading provider of financial services and products in the United States and Canada, released its Financial Security Monitortm (FSMtm) survey for the third quarter of 2024, revealing that a majority of middle-income Americans are feeling increasingly pessimistic about their personal finances, the economic health of their communities and their ability to save for the future.

"For the first time in a year, a majority of middle-income households are feeling negative about their personal finances. In fact, this latest report represents the highest negative rating we've seen since we began fielding the survey exactly four years ago," said Glenn Williams, CEO of Primerica. "Families continue to list inflation as their No. 1 concern, with the stress it brings spilling over into worry about being able to afford everyday essentials like food or groceries and going to the doctor as well as managing their rising credit card debt."

In contrast, Primerica's latest Household Budget Indextm (HBItm) indicates middle-income households experienced an uptick in purchasing power in August 2024 with the index climbing to 102.2%, up from 97.2% a year ago. The latest figure is positive news for middle-income families, signaling a greater ability to afford everyday expenses like food, gas, utilities and health care. However, the deep hole high inflation dug in their finances during the pandemic means they're simply not feeling the full effect of these gains yet.

"The economy has turned more favorable in recent months, but it will take time for the effects of lower interest rates, declining prices on necessities and rising wages to have a real impact on the bottom lines of middle-income families," said Amy Crews Cutts, Ph.D., CBE®, economic consultant to Primerica. "The financial challenges these households are grappling with are poised to persist through the end of this year ? and likely beyond. It's clear this is a marathon, not a sprint."

Key Findings from Primerica's Q3 U.S. Middle-Income Financial Security Monitortm (FSMtm)

Primerica Financial Security Monitortm (FSMtm) Topline Trends Data

Sept
2024

 

Jun
2024

 

 

Mar
2024

 

 

Dec
2023

 

 

Sept
2023

 

 

Jun
2023

 

 

Mar
2023

 

 

Dec
2022

 

Sept
2022

How would you rate the condition of your personal finances? Share reporting "Excellent" or "Good."

44%

49%

50%

50%

49%

50%

52%

53%

53%

Analysis: Respondents are increasingly negative in their assessment of their personal finances.

Overall, would you say your income is...?

Share reporting "Falling behind the cost of living"

68%

66%

67%

68%

72%

71%

72%

72%

75%

Share reporting "Stayed about even with the cost of living"

24%

26%

25%

24%

20%

22%

21%

20%

19%

Analysis: Concern about meeting the increased cost of living remained steady with 92% noting an inability to get ahead.

And in the next year, do you think the American economy will be...?

Share reporting "Worse off than it is now"

25%

40%

46%

53%

56%

57%

53%

56%

51%

Share reporting "Uncertain"

34%

19%

18%

9%

9%

9%

7%

8%

8%

Analysis: While fewer respondents think the economy will definitely get worse over the next year, the rising share that are uncertain about its direction accounts for most of the change.

Do you have an emergency fund that would cover an expense of $1,000 or more (for example, if your car broke down or you had a large medical bill)? (Reporting "Yes" responses.)

61%

63%

62%

60%

62%

61%

58%

59%

60%

Analysis: The percentage of Americans who have an emergency fund that would cover an expense of $1,000 or more has remained steady over the past year.

How would you rate the economic health of your community? (Reporting "Not so good" and "Poor" responses.)

63%

58%

60%

57%

55%

54%

59%

53%

55%

Analysis: Respondents' rating of the economic health of their communities has gotten worse over the past year.

How would you rate your ability to save for the future? (Reporting "Not so good" and "Poor" responses.)

73%

68%

67%

73%

71%

71%

73%

74%

73%

Analysis: A significant majority continue to feel it is difficult to save for the future.

In the past three months, has your credit card debt...? (Reporting "Increased" responses.)

35%

30%

34%

35%

34%

33%

33%

39%

37%

Analysis: Credit card debt has remained about the same over the past year.

About Primerica's Middle-Income Financial Security Monitortm (FSMtm)

Since September 2020, the Primerica Financial Security Monitortm has surveyed middle-income households quarterly to gain a clear picture of their financial situation, and it coincides with the release of the monthly HBItm four times annually. Polling was conducted online from September 10-13, 2024. Using Dynamic Online Sampling, Change Research polled 999 adults nationwide with incomes between $30,000 and $130,000. Post-stratification weights were made on gender, age, race, education and Census region to reflect the population of these adults based on the five-year averages in the 2021 American Community Survey, published by the U.S. Census. The margin of error is 3.4%. For more information visit Primerica.com/public/financial-security-monitor.html.

About the Primerica Household Budget Indextm (HBItm)

The Primerica Household Budget Indextm (HBItm) is constructed monthly on behalf of Primerica by its chief economic consultant Amy Crews Cutts, PhD, CBE®. The index measures the purchasing power of middle-income families with household incomes from $30,000 to $130,000 and is developed using data from the U.S. Bureau of Labor Statistics, the US Bureau of the Census, and the Federal Reserve Bank of Kansas City. The index looks at the cost of necessities including food, gas, utilities, and health care and earned income to track differences in inflation and wage growth.

The HBItm is presented as a percentage. If the index is above 100%, the purchasing power of middle-income families is stronger than in the baseline period and they may have extra money left over at the end of the month that can be applied to things like entertainment, extra savings, or debt reduction. If it is under 100%, households may have to reduce overall spending to levels below budget, reduce their savings or increase debt to cover expenses. The HBItm uses January 2019 as its baseline. This point in time reflects a recent "normal" economic time prior to the COVID-19 pandemic.

Periodically, prior HBItm values may be revised due to revisions in the CPI series and Consumer Expenditure Survey releases by the U.S. Bureau of Labor Statistics (BLS). Beginning with the October 2023 release of the HBItm data, health insurance costs will no longer be included in the calculation of the HBItm data as part of the healthcare component because of some newly acknowledged methodology that has been used by the BLS to calculate the health insurance CPI. The health insurance CPI, as calculated by BLS, does not measure consumer costs of health insurance such as the cost of premiums paid or a combination of premiums and deductibles, but rather premium values retained by health insurers we do not believe it accurately reflects consumer experiences. The healthcare component will continue to include medical services, prescription drugs and equipment. Prior published values have been adjusted to reflect this change. For more information visit householdbudgetindex.com.

About Primerica, Inc.

Primerica, Inc., headquartered in Duluth, GA, is a leading provider of financial products and services to middle-income households in North America. Independent licensed representatives educate Primerica clients about how to better prepare for a more secure financial future by assessing their needs and providing appropriate solutions through term life insurance, which we underwrite, and mutual funds, annuities and other financial products, which we distribute primarily on behalf of third parties. We insured approximately 5.7 million lives and had approximately 2.9 million client investment accounts on December 31, 2023. Primerica, through its insurance company subsidiaries, was the #2 issuer of Term Life insurance coverage in the United States and Canada in 2023. Primerica stock is included in the S&P MidCap 400 and the Russell 1000 stock indices and is traded on The New York Stock Exchange under the symbol "PRI".


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