Finance in the News: A Look at the Principal Financial Well-Being Index

Every quarter the Principal Financial Group has Harris Interactive conduct a survey of the financial well-being of adults working at small and mid-sized U.S. businesses.  So, how do Americans feel about their financial well-being?  The answer can be found in the “The Principal Financial Well-Being Index – Summary 4th Quarter 2011.” 

The results show that the economy, and the uncertainty surrounding it, produces a good deal of stress.  Unfortunately, much of this stress is centered on things that individuals can’t control.  But there are things, even during this time of uncertainty, that you can control and it is important that you focus on what you can control – have a plan to achieve your financial goals, have a sound emergency fund, actively save for your goals, and protect your assets.

What were their top concerns for 2012?

  • Economic uncertainty (62 percent)
  • Gas prices (58 percent)
  • Health care costs (55 percent)
  • Food prices (49 percent)
  • Increased taxes (45 percent)

The survey also reported the top New Year’s resolutions for 2012 made by these working adults.  The top three are:

  • Save a set amount of money each month (26 percent)
  • Work toward paying off credit card debt (26 percent)
  • Reduce spending by a set amount each month (21 percent)

As you look at the top financial concerns, where the respondents felt they had no control, followed by the New Year’s resolutions, where control is totally in the hands of the individual you will come to realize the importance of Principal 2: Nothing Happens Without a Plan as outlined in Personal Finance, Turning Money Into Wealth.  Basically, because it is “easier to spend than it is to save” having a financial plan is having control, the New Year’s Resolutions all revolve around “having a plan”.

Discussion questions:

  1. What are your New Year’s financial resolutions for 2012? (If you don’t have any, you’ll need to come up with some.) Be prepared to share these with your class.
  2. What steps have you taken toward making a financial plan?

Written or discussion assignment:

  1. Take a look at the “The Principal Financial Well-Being Index – Summary 4th Quarter 2011,” what were the top financial blunders that were made in 2011 (note: EE refers to current employees in the tables)?  Did make any of the same mistakes? Which ones?
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