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Financial News

Aug 9, 2022

90% of Americans Want to Invest but Almost Half Don’t Know Where to Start

In the first annual State of Money in America report, Stash finds out how a cross-section of Americans feel about the economy and their own financial futures.

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Current State of the U.S. Economy according to Americans

Changes to the economy can affect more than your wallet. 

When the markets shift, it can change how you feel about your own finances and your future. 2022 has brought several, sometimes contradictory, changes in the economy: the highest inflation rate since the 1980s, low unemployment, and higher-than-ever debt. This summer, Stash conducted its first annual State of Money in America survey to find out just how Americans are feeling about money and their own financial wellness. This research was fielded by Prodege, a leading global market research provider. In total 2,028 Americans 18 and older were surveyed, with the overall sample distribution matching census benchmarks.

In this article, we’ll cover:

  • The state of Americans’ finances
  • How Americans feel about debt and overall financial wellness
  • What Americans think about investing and their financial futures

What Stash’s survey found

The survey found that people are cautious about the economy now, but optimistic about the future. Almost two-thirds of respondents (62%) said they think they will be better off in 2023 than they are now. They are also interested in building up their savings for the future. While 90% of those surveyed said that they want to build wealth, almost half said that they don’t know where to start. 

And the data shows that respondents haven’t taken one of the most important steps: opening a brokerage account. The survey found that most American consumers have savings (69%), checking (83%) and even retirement accounts (49%), but only 31% have non-retirement investment accounts. 

Read more about Stash’s survey findings below. 

Seventy percent of Americans share cautious optimism about their financial futures

Respondents are feeling good about their personal financial outlooks. Seventy percent of those surveyed said they feel strongly or somewhat optimistic about their financial futures. Most respondents (60%) said that they think given the state of the world, it’s best to keep their money “liquid,” or easily accessible so that they might be able to spend it in a pinch.

The current state of financial wellness in the U.S. 

Stash’s survey also asked participants to describe their current financial situation. Most reported that they have a solid grasp on their monthly expenses, but saving money on a consistent basis is out of reach for many of them: 

When asked if they feel like they have enough financial resources to cover an emergency, two-thirds of those surveyed said that they strongly or somewhat agree that they do. And more than half described seldom or never dipping into savings to cover monthly bills and expenses. But still, a third said they are living paycheck-to-paycheck, or not able to cover their expenses, which makes it difficult and even impossible to save. 

The effect of the pandemic on financial wellness

One reason people are struggling to save could be that the pandemic has had significant effects on the overall economy, leading to layoffs, domestic labor shifts, and more. While 51% of survey takers said that it has had no impact on their personal financial health, the other half said it did. Thirty-eight percent of respondents said it had a negative impact, and 11% said it had a positive impact. 

Debt in the U.S. 

Debt is at the forefront of consumers’ minds right now. As of the fourth quarter of 2021, U.S. consumer debt approached $16 trillion, making the largest quarterly jump since 2007, primarily due to housing debt. Among non-housing debt, the biggest contributors are student loans and auto loans. 

It’s no surprise then that when Stash asked people how they would use $10 million, the three top choices were paying off debt (29%), buying a new home (16%), and investing more (14%). 

Paying down debt is not only important but achievable for those surveyed, with 39% saying that paying off debt is a goal they are on track to achieve in the next 12 months. After that, 28% of Americans indicate they are planning to purchase a car.

Most Americans are very or somewhat confident in their investing knowledge

Primarily, the people surveyed said they learned about finance and investing from personal experiences or from familial influence. Outside of retirement investing, the majority (52%) of those surveyed started investing between the ages of 18 and 30. 

When it comes to making investment decisions, 13% of respondents said they feel very comfortable in their ability, and 41% said they feel somewhat confident. And most of those surveyed (51%) believe that they are financially better off than their peers.

A little less than half—45%—of those currently investing in retirement savings accounts, such as a 401(k) or an individual retirement account (IRA), said that they don’t fully understand those investments.

Financial wellness as part of overall wellness

Maintaining financial well-being is a critical part of general wellness. Eighty-six percent of respondents said they considered financial wellness part of overall wellness. Staying on top of your personal finances is top-of-mind for many, with more than a third of survey takers thinking about money, stocks, or crypto more than sex.

Having money and managing it well can help you maintain a healthy lifestyle, with more than half of respondents saying that they would eat better or healthier with more money. A third said they have skipped medical appointments because of their finances. 

Despite this finding on money and quality of life, when asked whether they would rather be a millionaire or be best friends with pop singer Lizzo, nearly 10% went with Lizzo.

Unfortunately, we can’t help you become friends with Lizzo. But if you want to build wealth and you feel like it’s impossible to know where to start or like you can’t —like many of the people surveyed—Stash is the perfect place to begin. Stash gives you access to an easy and affordable platform to make your first investment, while also providing you with the tools and education you need to learn as you go, no matter how much experience you have. Our objective is to help regular Americans grow wealth by removing the barriers to achieving that goal. 

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author

Written by

Claire Grant

Claire is a content writer for Stash.

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