Planning & Progress 2013

“Saving and Spending Habits”

‘Northwestern Mutual’ is the marketing name for The Northwestern Mutual Life Insurance Company, Milwaukee, WI and its subsidiaries and affiliates.
Objectives and Methodology

Objectives
• To evaluate the state of financial planning in America, and people’s ability to stay on course over the
long‐term to meet their goals.
• To assess how Americans are responding to the pace of society, as well as the current economic and political
climate.
• To understand whether or not Americans feel they are ‘moving in the right direction’ in areas such as debt,
saving, spending, health, and finances.

Methodology
• Online survey of 1,546 Americans (via web panel) conducted between January 9-23, 2013.
– Qualified participants were those at least 25 years of age.
– Data is weighted to be representative of the U.S. population (age 25+) by age, gender, income, region,
household size, and marital status.

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Key Findings

One-third of Americans say “slow and steady wins the race” best describes their approach to
future financial goals (similar to 2012). Unexpected expenses and debt are most likely to
cause delays in saving.

• The subgroups with the most catching up to do include Gen Y, Gen X and parents. Parents also
mention debt at higher levels than those without children.
• Over 6 in 10 admit their financial planning needs improvement (an increase since 2012); the biggest
excuse is not having enough time.
• Not enough interest, confusion and not knowing where to find the right help are also fairly
commonly mentioned barriers.
• Compared to last year, more Americans say the single greatest barrier to better financial planning is
a lack of time and confusion.

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Key Findings

When asked what changes they’d made in the past 3 years, 22% said they’ve dipped into
retirement savings and 22% have stopped/reduced savings contributions.
– While the Mature generation is more likely than younger generations to have dipped into retirement
savings to cover a short-term need; Gen Y, singles, and those with children are most likely to say they’ve
stopped or reduced contributions to their savings account.

Compared to current habits, most Americans plan to spend either the same amount or less in the
next 12 months.

Half say their approach to the money they have today is “to save and be careful”. However, 14%
view themselves as spenders (compared to 10% who viewed themselves as spenders two years
ago).

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 One-third of Americans say “slow and steady wins the race” best
describes their approach to future financial goals. Unexpected
expenses and debt are most likely to cause delays in saving.

Slow and steady wins the race 34% Unexpected expenses 52%

I’d like to be more cautious, but Debt (mortgage, student loan,

47%
23% Car loan, credit card, etc.)
I have a lot of catching up to do
Lack of effective planning for the long term 37%
I have an even balance
22%
between risk and protection Concerns about job security/employment 32%

I’m comfortable with the risks I or my spouse was unemployed

29%
13% For a period of time
associated with growth strategies
Housing value declined 17%
I aim high, and am pursuing
3%
as much growth as possible Decline in retirement savings 16%

Other 3% Market losses on investments 12%

Don't save/invest/ Business venture failed 6%

2%
Don't have a plan
Other 5%

Debt: Have a lot of catching up to do:

Children <18 – 55% Gen Y – 28%
Children 18+ - 68% Gen X – 32%
CHILD No children - 38% AGE Boomers – 20%
STATUS Mature Gen – 13%

Q1105. Of the following statements, which best describes your approach to saving and investing for future financial goals? Select one. N=1,546 5
Q1110. Which of the following are reasons for wanting to catch up? Select all that apply. N=353
 Approaches to saving and investing have not changed
much since 2012.
Approach to Saving and Investing

2013 (N=1,546) 2012 (N=1,015)

34%
Slow and steady wins the race
36%
23%
I’d like to be more cautious, but I have a lot of catching up to do
21%
22%
I have an even balance between risk and protection
23%
13%
I’m comfortable with the risks associated with growth strategies
13%
3%
I aim high, and am pursuing as much growth as possible
3%
3%
Other
3%
2%
Don't save/invest/Don't have a plan
0%

Q1105. Of the following statements, which best describes your approach to saving and investing for future financial goals? Select one. 6
 Half say their approach to the money they have today is
“to save and be careful”.

Singles are more likely than marrieds to

MARITAL
consider themselves to be spenders
(17% vs. 12%). 51%
STATUS Spending vs. Saving “Save. Be careful
and aim for long-
term financial
security.”

35%
14% In the middle

“Spend. Enjoy
what has been
well-earned.
Live for today!”

Q1115. In terms of your approach to the money you have today, where do you see yourself on a ten point scale where 1 means “Spend. 7
Enjoy what has been well-earned. Live for today!” and 10 means “Save. Be careful and aim for long-term financial security.” N=1,546
 4 in 10 plan to save more in the next 12 months compared to
their current saving habits. Another 4 in 10 will save the same
amount.
• Those who aren’t likely to be saving much now, want to buckle down and save more in the next 12
months (especially those who have kids <18).
• When asked why they will save more, most say they want to be better disciplined, plan for
retirement and be prepared for emergencies.

Plan to Save More/Less in Next 12 Months

vs. Current Savings Habits

Not sure Much / The younger generations , Gen Y and

Gen X, is more likely to say they will save
9% Somewhat more in the next 12 months (56% and.
less 52%), while Boomers and Matures will
13% save the same amount or less (59% and
AGE 74%).

Much /
Somewhat
more The same
39% amount
39%

Q1085. In the next 12 months, how much more money do you plan to save, compared to your current savings habits? 8
Why will you save [ANSWER FROM Q1080 in the next 12 months? N=1,546
 Compared to three years ago, significantly more
Americans say they plan to increase their savings.

Plan to Save More/Less in Next 12 Months

vs. Current Savings Habits

n Much / Somewhat less n The same amount n Much / Somewhat more n Not sure

9% 13% 11% 16%

39% 33%
39%
40%

2013 2010
N=1,546 N=1,057

Q1085. In the next 12 months, how much more money do you plan to save, compared to your current savings habits? 9
 Although 3 in 10 have started or increased savings contributions
in the past 3 years, 22% have dipped into retirement and 22%
have stopped or reduced savings contributions.
• While the Mature generation is more likely than younger generations to have dipped into retirement savings to
cover a short-term need; Gen Y, singles, and those with children are most likely to say they’ve stopped or
reduced contributions to their savings account.

The Mature generation is most likely to have

dipped into retirement/long term savings to % stopped/reduced savings contributions:
cover a short term need: Single - 25%, Married - 20%
AGE Gen Y – 15%, Gen X 20%, Boomers – 21%, MARITAL
Mature Gen 35%. STATUS

% stopped or reduced savings contributions: % stopped/reduced savings contributions:

Gen Y – 30%, Gen X 21%, Boomers – 22%, <18 – 27%, 18+ - 26%, None – 20%
Mature Gen 17%.
AGE
CHILD STATUS

Q1125. Have you made any of the following changes in the past three years? Select all that apply. N=1,546 10
 Compared to current habits, most Americans plan to spend either
the same amount or less in the next 12 months.
• The subgroups most likely to say they want to decrease their spending over the next year include the
younger generations (Y and X), those with children under 18 and women.

Plan to Spend More/Less

in Next 12 Months
vs. Current Habits
Younger generations (Y and X) want to
spend less in the next 12 months
compared to older generations:
Gen Y – 45%, Gen X 44%, Boomers –
Not sure 39%, Mature Gen 28%.
AGE
Much / 6%
Somewhat
more Those with children under 18 would
Much / also like to spend less over the next 12
12%
Somewhat months (44% compared to 36% of those
CHILD without children).
less STATUS
39%
44% of women want to spent less in the
The same next 12 months compared to only 34%
amount of men.
43% GENDER

Q1095. In the next 12 months, how much more money do you plan to spend, compared to your current habits? 11
Why will you spend [ANSWER FROM Q1095] in the next 12 months? N=1,546