I enjoyed my tasty lunch of Chinese takeout and cracked open the accompanying fortune cookie—break-time entertainment.
What might its contents reveal? Lucky numbers? Words of wisdom? Bold proclamations as to fame, notoriety, or grand prize winnings?
Nothing. No slip of paper! No proclamations! No announcements of interesting outcomes!
No “easy answers.”
The bereft cookie led me to consider the definition of “fortunes”—in terms of not only turn of events, but sums of money.
What do consumers think about the “fortune of their fortunes?”
Are they comfortable with job prospects, retirement readiness, capability to finance large purchases?
Where do consumers see themselves in years ahead: better or worse?
Fortunately, data provides insight. The cookie can be cracked and answers revealed with regard to sentiment—even if no “easy answers” to the eventual outcome exist. Such insight allows accuracy in predicting outcomes, thus anticipating consumer needs.
‘There are good and bad times, but our mood changes more often than our fortune.’–Thomas Carlyle
What do consumers think about their money situations?
“One-third of Americans Worry about Money All the Time,” notes a Gobankingrates.com survey. “When money problems come up, people feel like every aspect of their life is in jeopardy,” says a financial expert.
Worries focused on living paycheck to paycheck, incurring major debt, and falling into homelessness.
Millennials are concerned about unemployment while baby boomers fear they will not be able to pay off debts. And, “Paying bills and asking other people for money back were the top two most dreaded tasks.”
Still, “Americans See More Money Coming Their Way,” according to Rasmussen Reports. Here, 50% of working adults think they will earn more money a year from today, while 8% expect they will make less. Thirty-five percent believe they will earn about the same.
“While most think their own financial situation will improve at least some over the next year, there is widespread concern about keeping up with the cost of living,” notes Pew Research in a recent survey on economic optimism.
About half of respondents (56%) believe family income falls behind cost of living. Thirty-seven percent believe income and living costs are on an even keel, and a mere 5% think their incomes grow faster than cost of living expenses.
“While no more than a quarter of the public has experienced any of the individual financial problems tested in the survey, fully 45% of Americans report having experienced at least one in the past year.”
Unfortunately, “the public is not optimistic about the direction of the national economy over the next year.”
Indeed, 22% feel conditions will worsen, 22% see improvements, and 54% expect little change.
Meanwhile, “U.S. Economic Confidence Index Remains on Plateau,” reports Gallup. Economic confidence reflects a “noticeable improvement” from 2009-2011. But, “The index has stayed within an eight point range so far in 2014.”
This statistic indicates confidence for consumers, though improved, remains stable. “Americans’ pessimistic views of the economy persist.”
‘Fortune favors the prepared mind.’—Louis Pasteur
What about retirement prospects?
“Working adults in their twenties expect to be worse off financially in retirement than their parents (59%), and take on more financial responsibility, including funding their own retirement,” says “The Young, Pragmatic and Penniless Generation Survey.”
The younger working demographic faces economic uncertainty with large student debt loads, high levels of unemployment, and coincidental employer retirement reforms that require greater employee funding as pensions disappear.
But this cohort is committed to or has ambitions to prepare for retirement:
“Better and more frequent information about my retirement savings” would incent 26% to increase savings, 23% would appreciate “access to a professional advisor,” and 22% desire “financial education so I am more aware of what I need to do for myself.”
An important takeaway: 24% believe family and friends are their most important resource in making savings choices, suggesting “employers and professional financial service companies are either not providing enough support” or fail to provide such help in a valuable manner.
“There is a strong need to undertake financial planning,” says The Aegon Retirement Readiness Survey 2014. Here noted, few (18%) adequately prepare for retirement, and 55% “recorded a low retirement readiness score.”
Lack of advance planning underpins the problem, and “The priority must be to encourage more people to start long-term saving, and to save regularly.”
Alarmingly, 61% do not have a contingency plan in the event of changing circumstances such as unemployment or inability to work prior to retiring.
“This is a very real risk facing people” as 45% of retired survey participants retired sooner than they’d hoped.
‘Luck is not chance, it’s toil; fortune’s expensive smile is earned.’ –Emily Dickinson
Ready for homeownership?
“The August National Housing Survey results lend support to our forecast that 2015 will likely not be a breakout year for housing,” says Fannie Mae. Despite favorable interest rates, “labor market strength has not translated into sufficient income gains to inspire confidence among consumers to purchase a home.”
Respondents who believe now is a good time to buy a house “fell to 64%, matching the all-time low” and those who think it a good time to sell fell to 38%.
However, “housing activity may resume its modest recovery in 2015 after some pullback this year.”
Indeed, “37% of U.S. homeowners now think the value of their home will go up in the next year,” notes Rasmussen. Further, “confidence levels in housing…remain well ahead of… the four years prior.”
Stability in housing confidence remains, says this source.
Then, “Why Aren’t More Renters Becoming Homeowners?” asks the New York Federal Reserve.
The primary reasons: weak balance sheets, inadequate income, and lack of access to credit.
“Fortune cookies are a good idea. If the message is positive, it can make your day a little better,” said basketball player Yao Ming.
Is the fortune positive for your members?
LORA BRAY is an information research analyst for CUNA’s economics and statistics department. Follow her on Twitter via @Bray_Lora, and visit the CUNA blog, “The Research Roundup: Economic Perspectives.”