Loan Modification

Homeowners Lack Savings Amid Growing Job Loss Fears

By Jay Hammond

Twenty-four percent of homeowners do not have any savings to cover their living expenses in the event they lose their job, according to the latest quarterly survey from Wells Fargo and Company. Although only 23 percent of survey respondents have managed to increase their savings during the past year, 60 percent indicate they want to increase their savings, up from 53 percent during the fourth quarter of 2008.

The survey results reveal a marked increase in homeowners’ desire to manage their debt and credit better rising to 40 percent from the previous survey level of 33 percent. Perhaps surprisingly, given that 30 percent say they are learning to manage their budgets  better, only 4 percent of those surveyed have sought professional help to improve their household budgets during the last year.

Even without professional advice and guidance, many people are drastically reducing their expenses. More than one-third of those surveyed have had family or friends move in with them since last year. Many have also adjusted their spending, with 42 percent reporting they are spending less on their children. Some (39 percent) are budgeting more and others (41 percent) are purchasing only what they need.

According to the survey results, homeowners are waiting for the economy to improve before making major purchases. When they do decide to buy, purchases related to home improvement will be the first choice of 30 percent of respondents, while 18 percent will buy a vehicle and 13 percent will go on vacation.

Putting off vacations is a popular tactic among those trying to save money. It is also popular among those worried about their job security, which 29 percent of those surveyed report as being their top concern. An improvement in their personal situation is the top indicator that would boost their confidence in the economy according to one of every four of the respondents.

The survey of U.S. homeowners was conducted by Ipsos Marketing on behalf of Wells Fargo and completed in March 2009.

?The results of the survey clearly indicate that customers need ? and want ? more help making smart financial decisions, and not just more help managing their financial accounts,? explains Ron Shevlin, senior analyst at Aite Group, a leading independent research and advisory firm focusing on the business, regulatory and technology issues impacting the financial services industry.

Full post as published by Blown Mortgage on May 20, 2009 (boomark / email).