Millennials or younger are experiencing the greatest burnout in the face of growing demand for digital products and financial advice
CLEVE-LAND, January 9, 2023 /PRNewswire/ — The KeyBank 2023 Financial Mobility Survey, released today, finds that Americans are in a difficult financial position, as 55% have faced financial challenges in the last year, a significant increase from the previous year (37%), more than double the number of respondents who cited budgeting issues as their top financial faux pas (89% vs. 35%). Yet even as Americans face these challenges, the majority (85%) desperately want to become more financially aware.
While 42% of respondents report feeling overwhelmed or experiencing burnout, millennials or younger report a higher burnout rate at 53%.
A significant increase in those who have faced significant financial challenges in the past year. 55% of those who say they have, compared to just 37% in 2021.
“After the rollercoaster ride of the past three years, Americans are much more aware of the financial challenges they face and are looking for ways to better manage their lives,” he said Mitch Kime, Executive Vice President of Consumer Client Growth at KeyBank. “More people have experienced loss of income, fewer feel financially savvy, and burnout is increasing among younger respondents. Given the current economic climate, it’s no surprise that Americans want to take control of their finances.”
The survey asked more than 1,000 Americans about their financial, life, and work priorities after a year of market volatility and uncertainty, and revealed the steps they’ve taken to become more financially mobile:
- Two in five people (42%) reported feeling overwhelmed or burned out on a regular basis, with burnout being more acute among millennials or younger (52%) and those under 35 (54%). To cope with this feeling, 39% of Americans spend less and plan more, followed closely by 25% of those who spend more on everyday essentials.
- Compared to the previous year, a good night’s sleep is no longer enough to feel more financially resilient. The top three things that will help consumers feel more financially resilient in 2023 are financial information (55% vs. 48%), digital banking tools (47% vs. 39%) and advice from a financial advisor (36%, versus 48%). vs. 29%) – resulting in a good night’s sleep (30% vs. 43%).
- One in three (33%) consumers protect themselves from financial faux pas by better identifying and prioritizing their needs over wants, but with plans to spend more on experiences or events, which is a must versus a nice-to-have can change.
“The past few years have taken a toll on individuals, affecting their financial and spiritual well-being,” he said Jamie Warder, Head of Digital Banking at KeyBank. “With the rise in income decline and the persistence of financial faux pas, many consumers have been less financially literate this year compared to last year. Still, Americans are paying far more attention to how much money is heading into 2023.”
To learn more about the survey results, read the KeyBank 2023 Financial Mobility Survey Executive Summary here.
Americans feel burned out but cope differently across generations
Americans of all ages are burned out, which has likely been made worse by the events of recent years. A combination of rising consumer costs, falling wages, and a perceived economic recession has left many Americans with financial challenges in 2022, and they’re doing whatever they can to cope.
Burnout can affect not only work performance but also overall financial health. Overcoming this feeling often requires drastic changes to achieve work-life balance, but one in four Americans (25%) chose to instead open their wallets and spend more on everyday necessities. Despite feeling stressed and overworked, over half (62%) still believe that work-life balance is more important than a high salary and continue to prioritize spending time with family and friends and theirs to improve finances. Additionally, 39% of those who felt overwhelmed or burned out took action by spending less and budgeting more.
Those who are millennials or younger, on the other hand, have chosen to make significant lifestyle changes and prioritize higher-paying salaries, spend more time doing things they enjoy, and be transparent about their financial woes. In fact, these respondents are far more likely to openly discuss their financial challenges with their partners (59%) than their Gen X and Boomer peers (43%).
While every generation has faced significant financial challenges this year, millennials or younger have continued to spend big and save little. They are less likely than their older peers to curb spending on discretionary items in the new year (50% vs. 74%). Seventy-eight percent (78%) of Millennials or younger made a large purchase in the last year, and 78% expect to make a large purchase next year. However, only 57% of millennials and younger can figure it out $2,000 instantly, compared to 70% of Gen X and Boomers.
Americans crave financial information and insight
Given the financial challenges consumers are facing, many chose to transform 2022 into a year of learning and laying a foundation to boost confidence and inspire financial mobility in the future.
Looking ahead to 2023, Americans want a double win of data and insight. Forty-seven percent of consumers say digital banking tools make them feel more financially resilient, with 72% familiar with online banking and 65% familiar with mobile banking apps. Americans continue to show a desire for digital approaches when it comes to financial support, emphasizing the importance for banks to meet their customers’ technology and experience needs. In fact, 46% of consumers who describe themselves as financial professionals rely more on digital tools today than they will in 2021.
“Each year we see Americans increasingly turning to digital and online banking tools to help them feel more financially resilient during tough times,” Warder said. “Not only are consumers familiar with online banking, but we’ve seen a 25% increase in the number of people using digital banking tools over the last year. As we work to meet our customers’ financial needs, we will continue to invest and expand our digital offerings to improve customer experience and satisfaction.”
Financial faux pas & redefinition of needs vs. wants
The proportion of consumers committing financial faux pas has remained constant throughout the year, but unlike in the past, these glitches are leading to lower confidence. Americans previously agreed that their biggest financial faux pas have affected savings goals. However, more than twice as many respondents (89% this year versus 35% last year) said their biggest financial faux pas involved budget issues. To protect themselves from a financial faux pas, one in three consumers (33%) identify and prioritize needs better than wants.
“Needs and wants have always been fluid among consumers, but this year we’ve seen a real shift in the way people approach their purchases,” says Kime. “As we enter 2023, the demand standard will continue to evolve and increase. As burnout becomes prevalent among consumers, things that were once viewed as desires, such as a vacation, are now viewed as necessary expenses for Americans. As Americans assess mental health and well-being in this new normal, we will continue to see what constitutes a shift in “need” in the coming year.
Most consumers are still planning big purchases this year, with two-thirds (66%) planning to make at least one big purchase in the next year. Consumers this year focused their spending on items such as clothing, technology and vacations, with vacations ranking first. Looking ahead, people expect rising costs. 40 percent of those considering a major purchase in the next year expect to spend more than they should have this year.
As consumers continue to become financially conscious and their spending and savings habits change, the pool of financial experts will expand and consumers will be equipped with the knowledge and information needed for a successful financial journey. To help with this, Key offers a large number of online resources to increase consumer financial savvy such as: B. their Financial Wellness Center, including the Banking 101 syllabus and access to planning a Financial Wellness Review to better understand your financial situation and chart the best way forward.
This survey was conducted online by Schmidt Marktforschung. 1,018 Americans ages 18 to 70 who have sole or joint responsibility for household financial decisions and who have a checking or savings account participated in the survey between September 8th and 16th, 2022. The survey asked respondents about their financial attitudes, understanding, awareness and actions over the past year.
KeyCorp (NYSE: KEY)’s roots stretch back nearly 200 years Albany, New York. headquarters in Cleveland, OhioKey is one of the nation’s largest bank-based financial services companies with assets of approximately $190.1 billion at 09/30/2022. Key provides deposit, lending, cash management and investment services to individuals and businesses in 15 states under the KeyBank National Association name through a network of approximately 1,000 branches and approximately 1,300 ATMs. Key also offers a wide range of sophisticated corporate and investment banking products, such as mergers and acquisitions advisory, public and private debt and equity securities, syndications and derivatives, to mid-market companies in select industries The United States under the trading name KeyBanc Capital Markets. Visit https://www.key.com/ KeyBank Member FDIC for more information.