Americans Are Postponing Major Life Events Due To Financial Worries: What Are the Implications?

College, marriage, children, houses, cars. Even computers.

Americans are increasingly delaying major life decisions due to financial worries - and the degree to which they are doing so is increasing, as the following article explains. Part time work, loss of benefits and lower wages are all contributing factors.

The question is the degree to which this may stymie or even reverse recent economic gains and perhaps stall future growth. JL

Ann Carrns reports in the New York Times:

A quarter said they had delayed higher education, up from 11 percent in 2007, and 18 percent said they had put off retiring, compared with 9 percent in the earlier survey. Twenty-two percent said they delayed buying a home in 2015, compared with 14 percent in 2007.

ABOUT half of American adults have postponed a major life decision in the past year for financial reasons, mainly because they lack sufficient savings or are worried about the economy, or both, a new survey finds.

The survey, conducted for the American Institute of Certified Public Accountants, found that the proportion of people delaying big decisions like buying a home or getting married had risen to 51 percent, from 31 percent in a similar survey in 2007, before the start of the financial downturn.

(The telephone survey of 1,010 adults, age 18 and older, was conducted in March by Harris Poll. The margin of sampling error is plus or minus 3 percentage points.)

The change was striking, and the percentages more than doubled in some areas. Nearly a quarter said they had delayed higher education, up from 11 percent in 2007, and 18 percent said they had put off retiring, compared with 9 percent in the earlier survey. Twenty-two percent said they delayed buying a home in 2015, compared with 14 percent in 2007.

The change was also evident in life decisions that weren’t solely financial in nature: 13 percent said they had delayed having children, compared with 5 percent in 2007, and 12 percent said they had postponed marriage, up from 5 percent in 2007.

Susan Bruno, a financial planner and a member of the institute’s National CPA Financial Literacy Commission, said that the young people she counsels, in particular, often say that it’s more difficult to sustain a relationship if a couple is under financial duress, so they are waiting until they have jobs that help them feel more secure about money. “They know the biggest stress on a marriage is financial,” she said.

Additionally, 19 percent put off a medical procedure, compared with 9 percent in 2007.

The primary reason given for the delays was a lack of savings, which was cited by 60 percent of Americans. That was followed by worries about the economy (50 percent) and difficulty paying monthly bills, other than the mortgage. Other reasons included a need to take care of older relatives or pay down credit card debt, and difficulty making mortgage payments, as well as concerns about job security.

But consumers in the recent survey did say they were trying to be more conscientious about their finances. More than half of respondents said they were adhering to a monthly budget (58 percent); 44 percent said they were saving more, and 35 percent said they were creating or adding to an emergency fund.

One way to quell financial worries is to figure out how to save money. Here are some questions and answers about budgeting and building savings:

■ Are there any new approaches to help consumers save?

A growing number of digital tools aim to help consumers put away cash for shorter-term savings by focusing on saving smaller amounts, said Jennifer Tescher, chief executive of the Center for Financial Services Innovation. For instance, Digit, a mobile savings service, analyzes your income and spending, and automatically transfers small amounts of cash to your Digit savings account every few days. The catch is that users have to feel comfortable connecting their checking account to the service, which says it uses bank-level security and doesn’t store your account login information.

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Another service, SaveUp, rewards you for saving or paying down debt. Participants receive credits, which can be redeemed for chances to win prizes.

■ Is it best to save small amounts consistently over a long period?

While many advisers counsel slow but steady savings, many people these days cope with fluctuating incomes that make it hard to set aside a fixed amount on a weekly or monthly basis, said Jonathan Morduch, a professor of public policy and economics at New York University and the managing director of the Financial Access Initiative. For these consumers, he said, it may be more feasible to “grab the spikes” — that is, set aside extra cash that may come your way, like a bonus or a tax refund.

■ Where can I find information about saving and establishing a budget?

The American Institute of C.P.A.s offers free financial tools on its consumer website, including a savings calculator. You can also try the America Saves program for free tips, like savings advice sent to you periodically via text.