According to a recent survey, Twin Cities residents are far less confident about their personal financial future than the optimism reflected from economists on Wall Street suggests.
Each year, Bloomington, Illinois-based Country Financial takes an index of Americans’ sentiments regarding their personal financial security and how they plan to spend their money in the coming year. The study compiles information from various research firms and a national telephone and online survey.
The firm then compares the public’s perception to Wall Street experts’, and it appears that Americans in general, and especially those living in the Twin Cities, are more pessimistic about the future of their personal finances, which is causing them to focus on paying down debt rather than increasing consumer spending.
According to the study, Wall Street experts believe that the average American will increase their consumer spending by 2.4 percent this year, whereas 79 percent of Twin Cities residents said they expect their spending to stay the same or even decrease. And of those who expect it to decrease, 59 percent said it will go down by at least 3 percent.
Wall Street experts also believe Americans’ personal incomes will rise by more than 3 percent in 2014. But only 39 percent of Twin Cities residents expect their incomes to increase. The other 56 percent say their personal income will stay the same or decrease this year.
While Minnesotans aren’t as confident as the experts, they are in fact more optimistic than average Americans throughout the rest of the country: 9 percent more Twin Cities residents expect their incomes to increase than the national average.
According to the study, Minnesota’s unemployment rate will increase to 5 percent by the end of 2014, which would still be lower than what the firm expects from the nation as a whole—6.3 percent. The study found that 70 percent of Twin Cities residents said they expect their personal job security to be about the same or worse in 2014.
“The job market is improving, with the Twin Cities having one of the lowest unemployment rates of the nation, but not improving as fast as many would like,” Troy Frerichs, senior investment officer at Country Financial, said in a statement. “It’s important for Twin Cities residents to concentrate on what they can control, including taking the time the evaluate and make any changes to your financial plan so you can keep your financial goals on track.”
On the more positive side, the study said economists expect a leveling off of household debt in 2014 for Americans nationally. And Twin Cities residents feel the same: 38 percent said they expect their personal debt to decrease this year, and of those, 30 percent plan to pay it down by at least 5 percent. Another 44 percent said their debt would stay the same, but only 15 percent expected it to increase.
This article is reprinted in partnership with Twin Cities Business.