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WSFS Bank Study Finds Americans Are Confident Managing Their Money, But Inflation, Rising Costs and Fears of an Economic Downturn Are Impacting Financial Security
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A survey conducted by WSFS Bank reveals that while 91% of Greater Philadelphia and 89% of national respondents feel confident in money management, many are struggling with economic challenges. Notably, 34% in the region lack confidence in weathering a recession, with 34% unable to afford rising living costs. 61% of regional respondents are reducing non-essential spending, and 52% would need to borrow for emergency expenses. A significant 71% desire more financial education, emphasizing the need for enhanced financial literacy and access to resources amid high interest rates and inflation.
Positive
Increased awareness of the need for financial education, with 71% of regional respondents expressing a desire for more.
Potential growth in financial product offerings as 62% find it easy to access financial products.
Negative
34% of regional respondents lack confidence in managing rising costs and potential economic downturns.
25% of regional respondents report increased debt compared to last year due to inflation.
52% would need to borrow for emergency expenses of $1,000 or more, indicating financial insecurity.
WILMINGTON, Del.--(BUSINESS WIRE)--
A new survey from WSFS Bank, the primary subsidiary of WSFS Financial Corporation (Nasdaq: WSFS), found Americans are confident managing their money, including 91% of respondents in the Greater Philadelphia and Delaware region (89% nationally), but 34% in the region were not confident they could weather an economic downturn or recession (41% nationally).
The study, which surveyed 1,001 residents of the Greater Philadelphia and Delaware region and 1,000 national respondents, gauged the financial goals, confidence and access of those 18 years and older.
Impact of Inflation and Rising Costs
The study found 34% of regional respondents (39% nationally) were not confident they could afford rising costs of living, and many are making changes to their spending habits as a result.
Nearly two-thirds (61%) of total regional respondents said they are cutting back on non-essential spending, compared to 69% nationally, while 42% of regional respondents said they are delaying a large purchase like a home, car or furniture. Thirty-eight percent of regional respondents are focusing more on paying down debt because of rising costs, while 33% are tapping into their savings to help pay for everyday items.
Rising costs and interest rates have also resulted in 25% of regional respondents saying they have more debt now than a year ago. Among regional respondents, Black (71%) and White (74%) respondents were more likely to cite higher prices and cost of living due to inflation as a reason for their increased debt than Hispanic or Latino (57%) respondents.
Half (52%) of regional residents said if faced with an emergency expense of $1,000 or more, they would have to borrow money, take out a loan or pay it off with a credit card over time. Sixty-one percent of regional Hispanic or Latino respondents would need to do this compared to 50% of White and 46% of Black respondents.
“Inflation and rising costs have had an impact on many consumers’ financial security and goals over the past year,” said Shari Kruzinski, Executive Vice President and Chief Consumer Banking Officer at WSFS Bank. “High interest rates are making borrowing more expensive. One silver lining to increased rates is the opportunity to earn more on your savings by using higher interest savings tools like High Yield Money Markets and Certificates of Deposit (CDs). The most important thing is to strive to maintain a balanced budget. If you need more assistance, consider setting up an appointment with your local banker to discuss the accounts, products and services that may work best for your unique financial situation.”
Financial Education and Confidence
The impact of the current economic environment also played a role in the top financial goals this year, with regional respondents saying that building an emergency fund (52%) is their top goal, followed by increasing savings in retirement accounts (49%) and paying off debts (47%).
A key driver behind respondents’ financial confidence was their financial education. Banks and financial service providers (43%) topped the list of where regional respondents received their financial education, followed by websites, blogs, social media, podcasts and other online sources (42%).
Regionally, 44% feel they did not receive enough financial education and guidance about managing their money, and this figure rises to 52% nationally. Black respondents in the region (55%) were more likely to agree with this sentiment than White (45%) and Hispanic or Latino (30%) respondents. On the regional level, 45% of respondents said they felt disadvantaged by the amount of financial education they received, with Hispanic or Latino respondents (60%) being more likely to agree than White (39%) and Black (44%) respondents.
“Financial education plays a key role in building the confidence needed to achieve many major goals in life,” said Vernita Dorsey, Senior Vice President, Director of Community Strategy at WSFS Bank. “We understand the importance of working with the broader community to provide key lessons to students and adults of all age ranges. Learning is lifelong, and I encourage consumers to use tools like the WSFS Knowledge Center for tips and resources, in addition to our in-person Associate led workshops to further build their financial confidence.”
Importance of Financial Access and Advice
Seventy-one percent of regional respondents said they wished they had received more financial education (64% nationally), which can play a key role in building financial confidence to access the products and services needed.
Regionally, 30% said their financial institution has shared helpful financial advice through emails, online or through an app, and 26% said they were offered in-person advice.
Sixty-two percent in the region said they found it easy to access financial products to meet their individual needs, with Hispanic respondents most likely to agree (68%), followed by White (64%) and Black (47%) respondents.
High interest rates (39%) and fees/costs (39%) are the leading barrier to entry for regional residents when it comes to using financial products, with 36% and 43% of national respondents agreeing, respectively.
Survey Methodology
The study was conducted by research company Opinium. The sample includes 1,000 national respondents and 1,001 in the Greater Philadelphia and Delaware region who reside in five southeastern Pennsylvania counties (Bucks, Chester, Delaware, Montgomery and Philadelphia), four southern New Jersey counties (Atlantic, Burlington, Camden and Gloucester), and all three Delaware counties (Kent, Sussex and New Castle). All respondents were ages 18+. The online survey was conducted from February 28-March 8, 2023, with a combined regional and national margin of error of +/- 3.1 percent.
About Opinium, Inc.
Founded in 2007 Opinium is an award-winning strategic insight agency built on the belief that in a world of uncertainty and complexity, success depends on the ability to stay on the pulse of what people think, feel and do. Creative and inquisitive, the Opinium team is passionate about empowering clients to make the decisions that matter. Opinium works with organizations to define and overcome strategic challenges – helping them to get to grips with the world in which their brands operate. It uses the right approach and methodology to deliver robust insights, strategic counsel, and targeted recommendations that generate change and positive outcomes.
About WSFS Financial Corporation
WSFS Financial Corporation is a multibillion-dollar financial services company. Its primary subsidiary, WSFS Bank, is the oldest and largest locally headquartered bank and trust company in the Greater Philadelphia and Delaware region. As of December 31, 2022, WSFS Financial Corporation had $19.9 billion in assets on its balance sheet and $64.5 billion in assets under management and administration. WSFS operates from 119 offices, 92 of which are banking offices, located in Pennsylvania (61), Delaware (39), New Jersey (17), Virginia (1) and Nevada (1) and provides comprehensive financial services including commercial banking, retail banking, cash management and trust and wealth management. Other subsidiaries or divisions include Arrow Land Transfer, Bryn Mawr Capital Management, LLC, Bryn Mawr Trust®, The Bryn Mawr Trust Company of Delaware, Cash Connect®, NewLane Finance®, Powdermill® Financial Solutions, WSFS Institutional Services®, WSFS Mortgage®, and WSFS Wealth® Investments. Serving the Greater Delaware Valley since 1832, WSFS Bank is one of the ten oldest banks in the United States continuously operating under the same name. For more information, please visit www.wsfsbank.com.
