The American Dream is still achievable – and we all have a role to play in securing its future.
Last fall, CUNA Mutual Group polled more than 1,000 middle class Americans to gauge their sentiments toward the “American Dream” – that is, how they feel about their prospects for upward mobility. The results suggested cautious optimism, with survey respondents giving the middle class a “B minus” when asked to grade their ability to achieve the American Dream. While it may not have been an overwhelmingly positive sentiment, it still pointed toward a fundamental belief that the middle class’s financial security was on an upward trajectory, tracking alongside a decade’s worth of solid economic growth.
Just six months later, however, we’re starting to see the middle class’s confidence falter. We conducted a follow-up survey of middle-class Americans this spring, and found that fears of a potential recession after more than 100 consecutive months of growth has begun to chip away at the optimism they once displayed. In fact, nearly half of the Americans we polled expressed concern the U.S. would enter a recession in the next year. Moreover, the middle class now gives itself a “C” when it comes to achieving the American Dream.
How did this shift occur in such a short timespan – especially while the economy continues to thrive and unemployment remains low? The answer may lie in Americans’ growing recognition they may not be financially prepared for a downdraft. Though 61 percent of our Spring 2019 survey respondents say they feel confident about their personal economic situation, two-thirds of those respondents are only “somewhat” confident, meaning they can comfortably pay their bills, but want to save more in the long run.
This underscores a concerning trend we saw in our Fall 2018 poll: Fewer than half of those respondents were financially prepared for an emergency, with 30 percent having only 1-3 months’ worth of emergency savings, and 23 percent having no savings at all. Taken together, our two surveys paint a troubling and fragile picture of the future of the American Dream.
From my perspective, however, our data also points to something positive. The economy hasn’t bottomed out yet – so it’s good that Americans are beginning to recognize their vulnerabilities now. They’re still in a position to shore up their finances and put plans into place to help them achieve whatever they consider their American Dream: Starting a family, buying a home, putting a child through college, being able to comfortably retire, being able to travel.
It can be difficult to face one’s financial challenges, which may be driving some of the near-term pessimism we see in our most recent survey. But I’m willing to bet that, with the right guidance and resources, middle-class Americans can get closer to the American Dream than ever, even if a recession comes knocking on our door. Our job as financial services professionals, then, is to help provide our customers and members – middle class or otherwise – access to the knowledge they need to prepare a financial plan that will serve them whether the economy is up or down. In that way, we’re playing an important role in securing the future of the American Dream. We’re helping to build its foundation.