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Post-Recession, What is the Current State of Worker Finances?

As many of us keep a close watch on the latest stock market news, CareerBuilder’s just-released survey on worker finances (PDF) shows the financial situation for some workers is actually improving (albeit slowly). Forty-two percent of workers in the survey of more than 5,200 workers say they usually or always live paycheck to paycheck, an improvement from 43 percent in 2010 and in line with levels seen back in 2007, pre-recession.

Personal Finance: Living Paycheck to Paycheck

Signs that workers’ finances are improving:

  • The number of workers who have missed a bill payment has decreased since 2010: 20 percent say they have missed payments on bills in the last year, a slight improvement from 22 percent at this time last year.
  • 14 percent of workers making six figures say they live paycheck to paycheck, down from 17 percent in 2010.
  • 6 percent of these six-figure earners said they can’t make ends meet every month — but that’s an improvement from the 8 percent who said the same last year.

Gender wars

It appears that, though both genders have their share of financial issues, female workers continue to struggle more with their personal finances than their male counterparts:

  • 46 percent of female workers say they live paycheck to paycheck, compared to 38 percent of male workers.
  • 24 percent of female workers say they have missed a bill payment over the last 12 months, higher than male workers at 17 percent.

 They work hard for the money (so don’t mess with their cable TV)

“The majority of U.S. workers (72 percent) reported they are more fiscally responsible since the recession and have made a variety of changes to their living and spending habits,” said Rosemary Haefner, Vice President of Human Resources at CareerBuilder.

And while being more fiscally responsible may mean giving up some material comforts, workers said they would absolutely not give up the following regardless of their financial concerns:

  • Internet connection – 56 percent
  • Driving – 46 percent
  • Mobile phone – 42 percent
  • Cable TV – 27 percent
  • Going out to eat – 11 percent

 

The future is now later

Although as shown above, workers may be loath to give up a night out at the newest restaurant in town, giving up money that’s not in hand yet is sometimes a little easier — so it shouldn’t come as a huge surprise that some workers are making ends meet by dipping into their long-term savings.

  • 21 percent of workers say they have reduced their 401(k) contributions and/or personal savings in the last year to get by.
  • Others aren’t contributing to long-term savings at all: One-third (34 percent) say they don’t participate in any 401(k), IRAs or retirement plan programs.
  • Nearly two in ten workers who make six figures have reduced their contributions to savings and 401(k) programs each month (17%) — and 9 percent don’t participate in a 401(k) program or other personal savings plan at all.

Consider the following tips to pass on to your employees (or to use yourself) to ride out the economic downturn and prepare for the future:

  • Channel your inner Sherlock Holmes – Look at your expenses under a microscope. Takeout coffee, restaurant lunches and other everyday expenses can make a dent in your checking account. Create a spreadsheet to analyze what you spend each month. Once you see where your money goes, you can more easily determine where to cut back.
  • Be like the squirrel – Put an amount away, even if it is small. Regardless of the amount, set aside money each month for your short and long-term savings. If you have trouble fitting savings into your budget (or remembering to do it at all), set up an automatic deposit into a savings account.
  • Show off your flair for the frugal – Savings may be right under your nose. Talk to your HR department about how you can make the most of your organization’s benefits. Find out if your company offers discounts for vendors like banks, gyms, or car rental services, and ask for additional resources to help you select the right benefits plans for your budget.

Need a recap? Get a snapshot of workers’ current financial situations.

Amy McDonnell

About Amy McDonnell

Originally hailing from Ohio, Amy is the creative services manager on the content services team and has been with both CareerBuilder and the city of Chicago for nearly a decade. She writes on a range of recruitment topics on The Hiring Site, striving to bring a dose of clarity and humor to sometimes complicated issues around employee attraction, engagement and retention. When she's not working, Amy spends as much time as possible reading, pretending to be a chef, writing short stories, eating Nutella out of the jar, waiting for CTA buses and trains, going to see her favorite bands live, and spending time with people who inspire and challenge her.
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