As workers grapple with the current economic environment, from inflation and recession concerns to dips in emergency savings, a new survey by Thrivent shows many are questioning their values to prioritize short- and long-term savings needs.
Thrivent’s 2023 Financial Crossroads Survey found that three-quarters of Americans (64%) would prioritize saving for their own retirement over funding their parents’ extended care (25%), and 73% would rather invest any additional bonus money for the future over splurging on a vacation (27%).
Furthermore, 42% of Americans say they would pay off their debt if they received an unexpected large sum of money, rather than investing for the future (22%), or for traveling and experiences (5%).
“Many people expect this period of financial uncertainty to continue, and their fears could be getting in the way of making financial decisions that reflect their intention and values.”
Loren Hansen, Thrivent
Others prioritized savings towards their kids: slightly over half (56%) say they would rather save for their children’s college over their own retirement (44%).
Thrivent notes that because of the economic environment, more workers believe they’ll have to prioritize certain financial needs while offsetting others. Many are also working longer hours to afford “financial decisions closer to their values,” says Thrivent. According to the data, 53% of Americans prioritize working harder and longer hours to generate more income rather than making less, but having more free time to do what they love (47%).
“Many people expect this period of financial uncertainty to continue, and their fears could be getting in the way of making financial decisions that reflect their intention and values,” said Loren Hansen, vice president of Thrivent Advisor Groups, in a statement. “Increasingly, we’re seeing a need for purpose-based financial advice that helps people manage their money in the present and allows them to consistently connect those decisions to their main purpose and guiding values.”
Aligning personal values with financial decisions is becoming increasingly popular, reports Thrivent. So much so that 65% of Americans say their values are important to them when making financial decisions. According to the survey, Americans regard their family (76%), health and wellbeing (57%) and financial stability (39%) among their top three values. Still, 71% believe their financial decisions only sometimes or rarely align with the main themes in their lives.
Working with a financial advisor
Once people have an understanding of their current money habits, including budgeting, saving, and spending, then they can seek the advice of a financial professional, says Thrivent.
Advisors should ask their clients about their financial priorities in the short- and long-term, Thrivent notes, and more specifically, ask clients about the state of their finances and what area needs immediate attention.
Integrating client values into the overall financial picture can match a specific principal to a set target, says Thrivent. For example, if a client lists their values as “family” and “education,” like sending their child to college in a certain amount of years, an advisor can help by creating an outline with small steps that lead to the goal without risking other short- and long-term savings.
“Once equipped with a plan, people can start to act on their goals…” the research states. “Small steps matter, and if they’re able to do that across every financial goal, the impact over time can be substantial and make a meaningful difference in their overall financial picture.”
SEE ALSO:
- Inflation Fears Continue as U.S. Ranks 18th in Retirement Security
- Investors Expect Inflation to Normalize by End of Year
- Most Pre-Retirees Cite Inflation for Retirement Delay
Amanda Umpierrez is the Managing Editor of 401(k) Specialist magazine. She is a financial services reporter with over six years of experience and a passion for telling stories and reporting news. Amanda received her degree in journalism and government and politics at St. John’s University. She is originally from Queens, New York, but now resides in Denver, Colorado with her partner. In her free time, Amanda enjoys running, cooking, and watching the latest drama show.
