Recession-Related Money Worries are Worse Than Reality

Consumer Federation of America says you may be worrying too much

By + More

There are plenty of recession-related money worries to keep you awake at night. Just the thought of job loss, an unexpected medical bill not covered by insurance, or stock market losses could easily rob you of a peaceful slumber. But Stephen Brobeck, executive director of the Consumer Federation of America, says you may be worrying too much. “For most Americans, to date recession-related financial concerns have been greater than financial losses,” he said at a press conference yesterday promoting America Saves Week.  “But tens of millions who still have their jobs and have suffered little or no loss of retirement savings worry that a deepening recession will eventually cost them income or even their jobs.”

A new survey indicates that the majority of Americans are engaging in behaviors that will help them weather the recession. Some 72 percent of Americans currently say they have an emergency fund to pay for unexpected expenses such as car repairs or a doctor’s visit, according to a telephone survey of 1,001 adults in February by the American Savings Education Council and Opinion Research Corporation. And 73 percent of those surveyed wisely don’t spend all of their income and save the difference. “Even in a severe recession the overwhelming majority of Americans remain employed, receiving income… the damage that families suffer is typically less than the damage that families think they are going to suffer,” says Brobeck. “The percentage of families who think or worry that they are going to be losing their jobs increases.”

Many Americans are also taking steps to meet their financial obligations. Approximately 40 percent of Americans currently describe themselves as debt free and another 44 percent say they are actively taking steps to pay off their debts this year. Most mortgage holders (74 percent) also expect to pay off their loan before retirement.

But although the majority of Americans are saving for emergencies and paying down debt, there is some evidence in the survey that many families are failing to save for retirement. Only about half (51 percent) of adults say they are saving for retirement through a workplace program, down from 55 percent in February 2008.