Many, particularly the young, are reluctant to change financial ways, despite recession.
Yet fear may not be enough to encourage actual change. Despite the stormy economic conditions, more than a third of homeowners haven’t made significant changes to their financial habits.
“Homeowners are worried about their jobs, and debt is still historically high, however, many people may not be making the necessary changes to improve their finances,” Jamie Moldafsky, of Wells Fargo Home Equity Group, said in a press release.
Young homeowners, ages 18 to 41, appear less likely to modify their financial situation than homeowners ages 42 and older. Of those who haven’t altered their spending habits, 60 percent of young homeowners cite an obstacle preventing them from doing so, as opposed to the 27 percent of older homeowners who felt incapable of making changes.
Why no change?
Obstacles sited by young homeowners ranged from not knowing what to do (10 percent) or not wanting to change (2 percent) to failure to implement plans to improve financial behavior (22 percent.) The most prevalent bump, cited by 24 percent of the 1,600 homeowners interviewed, was the feeling that modifying behavior wouldn’t drastically improve their financial situation.
The young homeowners also appear to be at a loss regarding their credit. Thirty-five percent of homeowners from 18 to 29 have not gathered information on improving their credit — though they mention a need to do so — compared to only 11 percent of homeowners from ages 42 to 60.
Yet as unemployment rates increase — hitting 9.4 percent in July, according to the U.S. Bureau of Labor Statistics — and confidence decreases, most homeowners of all ages are adopting a more miserly attitude. Homeowners are spending less than they were a year ago, with around 50 percent cutting entertainment and vacation expenditures. A majority of Americans now compare prices when shopping and 37 percent report buying only what they need.
Others say that the recession has improved their budgeting skills and incited them to pay off past debt.
The silver lining of this economy seems to be the changes to more financial healthy behavior,” said Moldafsky.
See related: Poll: Americans losing sleep over finances