Mind on My Money, Money on My Mind: Report Also
Shows Finances Take a Toll on Mental and Physical Health – Even
More so Among Women
Bank of America today announced findings from the latest Merrill
Edge® Report, which reveals people are feeling simultaneously
optimistic and overwhelmed by their finances. Merrill is committed
to empowering clients and helping them plan for the future at every
age and in every stage of their financial lives through a
combination of tools, people and know-how across Merrill Edge
Self-Directed, Merrill Guided Investing, and Merrill Lynch Wealth
Management.
The report is a biannual study of more than 1,000 mass affluent1
Americans’ evolving financial concerns and priorities. It found
that 85 percent believe how they manage their finances today would
make their parents proud. This may be thanks to savvier spending
habits and the fact that 85 percent of Americans improved their
financial lives in meaningful ways in the last year:
- Forty-five percent worked at improving
their credit score, 43 percent worked toward paying off some or all
of their credit card debt, and 35 percent established an emergency
fund by setting enough aside to live on for three months without an
income.
- Far fewer people are paying only the
minimum balance on their credit card (17 percent), spending more
than half of their paycheck on a single purchase (14 percent), or
dipping into their retirement savings (11 percent).
- For parents, 81 percent would like to
leave an inheritance to their children, and many (38 percent) are
making sacrifices to their lifestyle today to do so, including
cutting back on dining out and entertainment (31 percent) and
reducing their travel and vacations (26 percent). Others are even
delaying retirement (18 percent), taking on a second job or working
longer hours (15 percent) in order to do so.
- These positive steps may be leading to
a higher level of confidence about one’s financial future. Gen Zers
and millennials – 44 percent and 48 percent – believe they’ll be
millionaires one day, and the majority of Americans across
generations are confident in their ability to retire when they want
(80 percent), leave money behind for their children (80 percent),
pay off student loan debt (77 percent), and even buy a second or
vacation home (57 percent).
- Many are also putting their money where
their mouth is, with 42 percent willing to spend more at a retailer
whose values align with their own, and 40 percent would stop buying
products from companies whose values fundamentally conflict with
theirs.
- And for all this great work, Americans
feel they deserve a treat – upon reaching a financial goal, 56
percent like to reward themselves, including 71 percent of Gen
Zers, 66 percent of millennials, 42 percent of Gen Xers, and 43
percent of baby boomers. The most popular rewards across all age
groups include material purchases such as clothing, shoes or
jewelry (48 percent); taking a vacation (48 percent); eating at a
nice restaurant (40 percent); and indulging in spa/beauty
treatments (24 percent).
Mind, body, and tollWhile Americans are becoming more
conscientious about money and mindful of their spending, many
report that their financial life weighs heavily on their minds,
affecting both their mental (59 percent) and physical (56 percent)
health – even more so among today’s younger generations and women
of all ages:
- Gen Z: mental health – 73 percent,
physical health – 69 percent
- Millennials: mental health – 69
percent, physical health – 66 percent
- Gen X: mental health – 58 percent,
physical health – 54 percent
- Baby boomers: mental health – 40
percent, physical health – 38 percent
- Women: mental health – 64 percent,
physical health – 60 percent
- Men: mental health – 52 percent,
physical health – 51 percent
The study found that 51 percent are worried about their finances
over the next five years, with top concerns including the potential
for an inadequate amount of savings (55 percent), political
instability (53 percent), a looming recession (47 percent), and
market volatility (45 percent). Another source of worry – debt (39
percent):
- Excluding their mortgages, 73 percent
of respondents are carrying some form of debt. The types of debt
respondents are dealing with the most include credit cards (43
percent), auto loans (36 percent), student loans (20 percent), and
personal loans (15 percent).
- Forty-six percent of respondents with
debt owe more than $20,000, while 18 percent owe $50,000 or
more.
- In order to pay off debt, 68 percent of
respondents are putting certain activities and milestones on the
back burner, including going on vacation (43 percent), buying a car
(37 percent), buying a home (30 percent) and having children (19
percent).
“On the bright side, Americans are prioritizing their financial
goals, and taking steps towards improving their futures,” said Aron
Levine, head of Consumer Banking and Investments for Bank of
America. “However, many find managing their money today causes them
a great deal of stress. The key is to find the right balance of
short- and long-term planning, and always to take steps forward
without placing a heavy burden on one’s current financial situation
or well-being.”
Hypothetically, if given the choice to never have to manage
their personal finances again, Americans would rather:
- Give up all social media platforms
forever (41 percent).
- Cut carbs, sugar and/or alcohol from
their life (37 percent).
- Lose access to their smartphone for a
month (35 percent).
- Run into their ex every time they’re
out with their current partner (25 percent).
- Move back in with their parents (25
percent).
Help wantedPerhaps the need to tackle debt and overcome
the stress from their finances are why 55 percent of respondents
are currently turning to professional financial guidance, either in
person or online, and why two-thirds plan to do so in the future. A
growing number are also embracing new technology and financial apps
to help save and manage their money, including consumer banking
apps (71 percent), money transfer apps (65 percent), personal
finance apps (63 percent), and automated investment apps (57
percent).
You can’t take it with you – they hopeMeanwhile, in the
midst of the largest generational wealth transfer in history, many
Americans (39 percent) expect to inherit or already have inherited
all or part of their family’s estate, including cash (68 percent),
personal property (57 percent), real estate (53 percent), and
securities (41 percent). In fact, 58 percent of Americans believe
their financial stability and lifestyle would benefit significantly
or only be made possible by an inheritance from their family.
The good news is 92 percent plan to leave money and other assets
behind, mainly to their children (59 percent), spouse/partner (54
percent), siblings (17 percent), and nonprofit organizations (17
percent). However, that doesn’t necessarily mean they have a plan
in place to do so.
- Sixty-four percent of Americans have
not consulted with a financial professional about their estate
planning, including 46 percent of seniors and 59 percent of baby
boomers.
- One in three parents favor an early
inheritance and would rather transfer wealth to their children now,
instead of waiting until they are gone.
“Creating a long-term financial plan with reasonable, achievable
goals along the way is important,” said David Poole, Consumer
Investments Solutions and Client Services executive at Bank of
America. “This can help Americans find a balance between living the
lifestyle they want now, while working toward major milestones and
leaving a legacy for their children.”
For more in-depth information about the financial behaviors and
priorities of mass affluent Americans, read the entire spring 2019
Merrill Edge Report. A complementing infographic is
available here.
1 Merrill Edge Survey Methodology
Concentrix (an independent market research company) conducted a
nationally representative, panel-sample online survey on behalf of
Merrill Edge April 17-May 9, 2019. The survey consisted of 1,000
mass affluent respondents throughout the U.S. Respondents in the
study were defined as aged 18 to 23 (Gen Z) with investable assets
between $50,000 and $250,000 or those aged 18 to 23 who have
investable assets between $20,000 and $50,000 with an annual income
of at least $50,000; or aged 24-plus with investable assets between
$50,000 and $250,000. For this purpose, investable assets consist
of the value of all cash, savings, mutual funds, CDs, IRAs, stocks,
bonds and all other types of investments such as a 401(k), 403(B),
and Roth IRA, but excluding primary home and other real estate
investments. We conducted an oversampling of 300 mass affluents in
Atlanta. The margin of error is +/- 3.1 percent for the national
sample and about +/- 5.6 percent for the oversample market,
reported at a 95 percent confidence level.
Bank of AmericaBank of America is one of the world’s leading
financial institutions, serving individual consumers, small and
middle-market businesses and large corporations with a full range
of banking, investing, asset management and other financial and
risk management products and services. The company provides
unmatched convenience in the United States, serving approximately
66 million consumer and small business clients with approximately
4,400 retail financial centers, including approximately 1,800
lending centers, 2,200 financial centers with a Consumer Investment
Financial Solutions Advisor, and 1,500 business centers;
approximately 16,400 ATMs; and award-winning digital banking with
more than 37 million active users, including over 27 million mobile
users. Bank of America is a global leader in wealth management,
corporate and investment banking and trading across a broad range
of asset classes, serving corporations, governments, institutions
and individuals around the world. Bank of America offers
industry-leading support to approximately 3 million small business
owners through a suite of innovative, easy-to-use online products
and services. The company serves clients through operations across
the United States, its territories and approximately 35 countries.
Bank of America Corporation stock (NYSE: BAC) is listed on the New
York Stock Exchange.
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Reporters May Contact:Susan Atran, Bank of America,
1.646.743.0791susan.atran@bankofamerica.com
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