BMO Real Financial Progress Index: Americans Consider Side Hustles and Investing Amid Rising Financial Anxiety

Rhea-AI Summary

4 out of 5 Americans experience financial anxiety amid inflation and rising interest rates, with top concerns being unknown expenses, housing costs, and family-related expenses. 43% cannot save after expenses, while 66% lack a financial plan. Americans seek advice on investing, side hustles, saving, budgeting, and debt management. Half of Americans are not making financial progress due to inflation. BMO provides digital tools and resources to help customers achieve financial goals.

Positive

• Americans interested in investing and side hustles
• BMO provides digital tools for financial progress

Negative

• Financial anxiety due to inflation and rising interest rates
• Half of Americans not making financial progress

• Most Americans (82 percent) say they want personal finance advice that includes topics like side hustles, investing, budgeting and debt management
• 4 out of 5 say their financial situation is causing anxiety, with housing costs a top factor
• 43 percent of Americans say they do not earn enough money to put anything into savings after paying expenses and 66 percent have no financial plan

CHICAGO, Sept. 13, 2023 /PRNewswire/ - The latest BMO Real Financial Progress Index reveals that amid current economic conditions, such as inflation and rising interest rates, 4 out of 5 (80 percent) Americans say their financial situation is causing them financial anxiety with most (82 percent) interested in seeking advice on personal finance goals to improve their situation.

Top areas of interest where Americans want help growing and managing their money to achieve financial security include the following:

• Investing (43 percent)
• Side hustles (37 percent)
• Saving (27 percent)
• Budgeting (25 percent)
• Debt management (25 percent)

Additionally, with most Americans (80 percent) saying their financial situation is causing anxiety, the top factors driving concerns are:

• Fear of unknown expenses (83 percent)
• Housing costs (67 percent)
• Family-related expenses (68 percent)
• Medical expenses (62 percent)
• Credit card debt (51 percent)

In fact, year-over-year, more Americans say their concerns over housing costs, credit card debt, and keeping up with monthly bills and are preventing them from making real financial progress. Additionally, 43 percent of Americans say they do not earn enough money to put anything into savings after paying expenses.

"Given the current economic climate, it's clear people want to take action to become more financially secure – even going so far as to think about additional sources of income. Ultimately, what these findings show is that Americans want additional financial advice and resources to help with money management," said Paul Dilda, Head of Consumer Strategy at BMO. "With increasing costs proving challenging for many, it's important that Americans know there are free resources available to help make financial progress – even in uncertain periods – such as meeting with your banker to create a budget and help build a personalized plan to make the most of their money that also address the various sources of income a person may have."

As elevated inflation continues, nearly half of Americans aren't making financial progress

With the current inflation surge now stretching past two years, nearly half (46 percent) of Americans say they are not making financial progress. Out of those who are not making progress, 36 percent said they are not getting ahead with their savings or goals. Additionally, 66 percent say they have no written financial plan.

According to BMO Economics, the U.S. inflation rate has accelerated to 3.3 percent in July with the Fed target range for interest rates hovering between 5.25 to 5.5 percent. Additionally, home prices for the country's 20 largest cities climbed 0.9 percent in June, the fourth straight monthly gain.

"U.S. consumer confidence fell more than expected in August amid still-elevated food and gas prices, softening labor market conditions and economic uncertainty," said Michael Gregory, Deputy Chief Economist and Head of U.S. Economics at BMO. "Despite this and after several Fed rate hikes, the economy is still growing – 2 percent in the most recent quarter – and consumer price inflation has come down nicely from last summer's 40-year high of 9.1 percent to just above 3 percent. Looking forward, the Federal Reserve has made it clear that a 2 percent inflation rate target is still the goal, but that we have a long way to go."

Americans rely on bankers, financial advisors, and digital banking apps to make financial progress

The Index also found that more Americans are relying on their banker or financial advisor today to reach their financial goals compared to a year ago – 53 percent compared to 49 percent in 2022.

Americans also say they have a strong preference for digital banking apps that provide useful resources, with 7 in 10 (70 percent) saying the tips and tools in their digital banking app help them make real financial progress. 54 percent of Americans have seen improvement in their financial progress since using their digital banking app, and nearly half (49 percent) say they have set specific financial goals through their digital banking platform.

"These BMO Real Financial Progress Index findings reinforce the fact that customers want leading digital experiences that help them do more with their money. BMO is committed to meeting our customers' evolving needs and expectations with the digital tools they need," said Mat Mehrotra, Chief Digital Officer at BMO. "At BMO, we blend both human and digital experiences that offer professional financial advice on digital banking, budgeting, debt management and more."

BMO provides customers with tools to build financial progress:

• SmartProgress: Tips and resources for everything from building financial resilience, homeownership, preparing for retirement, budgeting, and more.
• Savings Goal: With BMO's mobile app, customers can set up, track progress, and reach savings goals.
• Credit View: In collaboration with TransUnion^®, BMO gives customers no-fee, no-impact access to credit scores to start monitoring and learn steps to build credit.
• Total Look: Customers can easily view, track, and manage their BMO and non-BMO financial information, from checking and savings accounts to credit cards, investments, loans, and mortgages.
• Assist: An AI-augmented platform – blending the best of both human emotion and empathy with the speed and efficiency of computer intelligence – allows customers to ask account and banking-related questions via its chatbot and live chat with a banker during business hours.

BMO helps Americans take control of their money

In addition to regularly meeting with your banker or financial advisor to make sure your savings and payment patterns are on track to reach both near- and long-term goals, additional tips include:

• Track your incoming and outgoing money flow as well as expenses that will help build the framework to create an accurate budget.
• Establish and build credit with credit-building solutions such as a credit building loan or secure card – and monitor your credit report score and activity often.
• Set up a savings goal and recurring savings transfers into an account – no matter the amount – which will provide a sense of progress and motivation to achieve your savings goal.
• Make a budget or savings plan specifically for large purchases like a car, vacation, or new appliance.

About the BMO Real Financial Progress Index

The research detailed in this document was conducted by Ipsos in the United States from June 27 to July 28, 2023. A sample of n=2,500 adults ages 18+ in the US was collected. Quotas and weighting were used to ensure the sample's composition reflects that of the U.S. population according to census parameters.

To learn more about how BMO can help customers make financial progress, visit: www.bmo.com/en-us/main/personal/.

About BMO Financial Group

BMO Financial Group is the eighth largest bank in North America by assets, with total assets of $1.25 trillion as of July 31, 2023. Serving customers for 200 years and counting, BMO is a diverse team of highly engaged employees providing a broad range of personal and commercial banking, wealth management, global markets and investment banking products and services to over 13 million customers across Canada, the United States, and in select markets globally. Driven by a single purpose, to Boldly Grow the Good in business and life, BMO is committed to driving positive change in the world, and making progress for a thriving economy, sustainable future, and inclusive society.

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SOURCE BMO Financial Group