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Great Recession Still Cramping Consumer Attitudes

Today’s workers are responsible for their finances in ways earlier generations weren’t.

June 24, 2014
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Jean Chatzky

Jean Chatzky signs copies of her book, "Money Rules," during CUNA's 2014 Governmental Affairs Conference.

Consumer attitudes about the economy are “mixed,” Jean Chatzky says. Chatzky spoke via webinar, hosted by the Filene Research Institute, as director of education for SavvyMoney.

While the economy has rebounded significantly, Chatzky, who also is financial editor for NBC’s “Today Show,” says 10% of mortgages still are underwater, compared with a historical rate of 5% in a normal economy.

Unemployment is down, but many workers are underemployed. Further, half of all consumers save nothing.

“The recovery is very regional,” Chatzky explains. “It all depends on the job and housing market where you live, and on your industry.”

She points out, too, that workers today have to be responsible for their finances in ways earlier generations did not: Previous workers had pensions, health coverage from an employer, and confidence in Medicare and Social Security.

Todays’ workers have 401(k) plans, higher co-pays and deductibles for health coverage, and faltering confidence in the safety net.

The good news—for consumers and credit unions—is that “People with jobs feel more secure—they spend and borrow.”

Chatzky cites predictions that spending on travel and entertainment will rise 20% by 2018. And yet she notes that saving rates have dropped from their recession upswings. “We’re back to a mid-4% saving rate range—the pressure to save is off.”

Chatzky says credit unions can help their members, and attract more of them, by fostering good financial habits. “Make sure members understand that, “Just because someone will lend to you does not mean you should borrow.” Help members learn the difference between good debt and bad debt.

“Managing money is a life skill, not just a financial skill,” Chatzky says.

SUSAN TIFFANY, CCUFC, is director of personal finance information for adults in CUNA’s market research and consumer education department.

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