Many Americans Believe They Are Leaving Money on the Table When It Comes to Their Personal Finances
Bank of America Study Shows Americans Are Spending More Wisely – in Line With New Year’s Resolutions – and Want Rewards for “Responsible” Behaviors
Roughly half of all Americans believe they are “leaving money on the table” with their personal finances, and the majority want rewards for the transactions they already make every day, in particular for “responsible” behaviors, according to the Bank of America Preferred Rewards Consumer Study.
Nearly two-thirds (64 percent) of consumers who have at least $20,000 in investable assets say they are spending more wisely, in line with common New Year’s resolutions on budgeting. Furthermore, more than four out of five surveyed (82 percent) work with at least two financial institutions, and some (28 percent) are doing so to maximize returns.
These consumers overwhelmingly want to be rewarded for the financial actions they are already taking, in particular those that can be deemed as responsible actions, such as depositing to a savings account (cited by 85 percent); making mortgage payments on time (74 percent); using a debit or credit card (72 percent); or depositing to a retirement account (70 percent).
“Americans want rewards that recognize them for their everyday banking actions, including daily spending, as well as activities they consider more responsible investment behaviors, such as investing for retirement,” said Aron Levine, head of Preferred Banking and Merrill Edge. “However, the data shows that most people have to shop around for the right rewards and services as they seek for opportunities to grow their nest eggs.”
Demanding practical rewards
Overall, this group is interested in making the most of the money they have: eight out of 10 (79 percent) want rewards that make their money go further, while just 20 percent want rewards to use toward a major purchase or special one-time activity.
A majority of these consumers (61 percent) say they most want rewards for everyday activities, and the most popular banking rewards are those that help grow or maintain existing balances. These include no-fee everyday banking services (cited by 67 percent), no ATM fees (53 percent), higher savings interest (50 percent) or cash back on purchases (50 percent).
“Consumers are seeking practical benefits from rewards programs,” Levine said. “At the same time, our research is clear that these consumers do not want to choose just one type of benefit; they are looking at the full spectrum of financial activity and want their banking partners to do the same.”
Value seekers lead the way
The study also shows that consumers are striving for value and simplicity in their expenditures. When asked to name the quality that best defines their spending habits, the most popular was value-seeking (cited by 21 percent); followed by simple spending that is focused on the basics (18 percent); then savvy spending defined as smart, informed decisions every time (15 percent).
To follow through on their shopping goals, many of those surveyed are taking steps to conserve money. Nearly two-thirds (65 percent) are bargain-hunting, such as using coupons or looking for sales, and 64 percent are spending more wisely, such as buying generic brands or buying in bulk.
In addition, half (50 percent) are spending less on entertainment, and more than four out of 10 (41 percent) are seeking small solutions that save money, such as using reusable water bottles or making sack lunches.
“Consumers are taking a number of different steps to be savvy and pursue their financial goals. That’s why we developed Preferred Rewards, another way to aid consumers on this journey by giving them extra rewards and practical benefits for a number of different everyday banking activities,” Levine said.
Concerns by age bracket
Concerns about saving increase with income and are affected by age. For instance, 64 percent of those surveyed with household income of more than $100,000 a year say they worry “a lot” about the amount of their savings. That figure drops to 57 percent for those with household income between $75,000 and $100,000 a year.
Members of Gen X, who are generally in their late 30s and 40s, are most concerned. Nearly three-quarters (72 percent) of that age group say they worry a lot about savings. That figure drops to 67 percent for millennials, who are in their 20s and early 30s.
“It makes sense that Gen X is feeling squeezed economically, as this generation is dealing with pressures from supporting their children and helping their parents to concerns about health-care costs and the economy generally,” Levine said. “This group in particular needs more options to make the most of their money.”
For more information, visit http://bankofamerica.com/preferredrewardsnews.
Better Money Habits
As Americans work on making the most out of their money and reaching their financial goals, they can increase their financial savvy by creating even better money habits. To support consumers in achieving their financial goals and improving financial knowledge, Bank of America partnered with Khan Academy – a nonprofit with the mission of providing a free, world-class education to anyone, anywhere. Together, they’ve developed BetterMoneyHabits.com, a free, objective online financial resource that pairs Khan Academy’s expertise in online learning with the financial expertise of Bank of America. The site allows users to identify goals important to them, and recommends videos, articles and tools that give practical, actionable steps to take on a daily basis to help them get on track financially.
Research design and analysis was conducted by Penn Schoen Berland and data collection by GfK. GfK conducted 1,017 interviews between November 21 and 24, 2014, with adult consumers aged 18+ with investable assets of $20,000-$250,000.
The study was conducted online using the GfK “KnowledgePanel,” an online probability-based panel designed to be representative of the US general population, not just the online population. Initially, participants are chosen scientifically by a random selection of telephone numbers and residential addresses. Persons in selected households are then invited by telephone or by mail to participate in the web-enabled KnowledgePanel®. For those who agree to participate, but do not already have Internet access, GfK provides at no cost a laptop and ISP connection. People who already have computers and Internet service are permitted to participate using their own equipment. Panelists then receive unique log-in information for accessing surveys online, and then are sent emails throughout each month inviting them to participate in research.
The data was also weighted to be reflective this universe based on MRI’s Fall 2013 data based on demographic variables of age, gender, education, HH income, race/ethnicity, region, and met/non met status. The margin of error for n=1017 is +/-3.1 percentage points. Individual audience segment sample sizes and margin of error are available upon request.
Bank of America
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