seeking financial stability in changing times

Seeking Stability in Changing TimesA Summary Report from Artemis Strategy Group’s Motivations Assessment ProgramTM

September 2016

1© Artemis Strategy Group 2016

© Artemis Strategy Group 2016 2

THE MOTIVATION ASSESSMENT PROGRAMTM MAPTM applies the Artemis Motivation Research approach to probe deeply into the goals, actions, barriers and motivations associated with Americans’ individual health and financial decisions, as well as the interactions between health and financial decisions. Measuring over 200 activities and attitudes through a large quantitative study (n=3041) we use this information to map the rational-to-emotional forces that underlie health and financial decision motivations.

© Artemis Strategy Group 2016

2016 Artemis Motivation Assessment ProgramTM

(MAP):

THE QUESTIONS What forces drive Americans’ financial decisions, and what are the key elements of those decisions?

THE APPROACHMAPTM applies our Motivation Research approach through a large quantitative study (n=3041) with respondents representing a diverse cross-section of America.

THE OUTCOMESInsights into the landscape of financial decisions of Americans. Opportunities to probe specific questions that might have audience, communications, product or policy implications.

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Seeking stability in changing times

Americans’ changed financial circumstances alter their goals and how they achieve them, including their financial decision making. Key points:

1. The new prominence of the search for stability

2. The dynamics of anxiety in financial decision making

3. Staying on top of it: the antidote to anxiety


Financial Goals: A common destination

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Regardless of contexts, financial stability is the new upward mobility. Caution is the watchword. Steady progress is the hope. But slipping backward is the fear.

The search for stability emerges as a huge determining factor in aspirations and actions, with a stark dividing line between stability/instability among Americans.

Barely one-third frame their goals in terms of growth; protection is the dominant theme.

A surprisingly large one in five acknowledge they are making up for problems in the past.

Context: different starting points

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Growing your assets for the future18%

Extending your current level of financial well-being in the future

16%

Protecting yourself from potential threats to your financial well-being

26%

Stabilizing your finances in order to make monthly ends meet

18%

Overcoming the consequences of unwise financial decisions in the

past9%

Recovering from setbacks that negatively affected your finances

12%

Proportion of Americans focused most heavily on each goal:

Americans’ perspective on their personal finances changes based upon where they start their journey.


Total

Growing

Extending

Protecting

Stabilizing

Overcoming

Recovering

45%

58%

51%

53%

28%

37%

26%

Achieving stability is key to satisfaction with one’s financial life

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Satisfied with Financial Situation by Goal Groups

The divide between “Stabilizing finances” and “Protecting against threats” is the point of transition between mostly negative and mostly positive emotions.


39%

26%

36%

31%

54%

50%

58%

Total

Growing your assets for the future

Extending your current level of financial well-being in the future

Protecting yourself from potential threats to your financial well-being

Stabilizing your finances in order to make monthly ends meet

Overcoming the consequences of unwise fi-nancial decisions in the past

Recovering from setbacks that negatively af -fected your finances

35%

44%

37%

45%

22%

25%

19%

Positive overall financial assessments happen when focus is on protecting stability rather than gaining stability

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Doing better financially than others

Q29: In comparison to other people your age, how would you say you are doing financially?

Doing worse financially than others



Financial Action: Anxiety drives assessment and action Anxiety is a significant presence in financial decisions.

Personal circumstances and the financial decision process itself can overwhelms many people with anxiety about financial decisions.

Even among those in better circumstances and focused on building equity, anxiety continues to play an outsized role for many.

Anxiety from efforts to regain/maintain financial stability originates both from events one can control (impulse spending) and barriers outside of individual control (economic downturn).

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Several sources of financial anxiety; some within one’s control and others not

Sources of Financial AnxietyLiving in a struggling economy 47%Feeling financially insecure 45%Living paycheck to paycheck 43%Unable to afford things you used to 36%Health issues and related costs 33%Lower than ideal credit score 28%

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The challenge is whether people are paralyzed or catalyzed by their anxieties.


Life(style) barriers to reaching financial goals

Three “barriers to financial success” create high anxiety for a majority of Americans: Balancing/negotiating conflicting financial obligations Drowning in debt and too high expenses Impulse spending and other bad habits

One “barrier” creates outright fear: Job loss


Staying on top of it: the antidote to anxiety

People react to their financial anxieties with an array of actions to achieve their financial goals AND the lives they yearn for.

Motivation Research analysis reveals rational-emotional “pathways of thought” with three critical dimensions Staying on top of financial activities through

learning and organizing Feeling smart and competent about financial

decisions The dominant personal value people seek is to

achieve a sense of financial stability

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A dramatic shift in the financial landscape: from reducing stress and remaining in control ….

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Benefits

Emotions

Personal Values

Maintain standard of living / have money available

Less Stress/Less Worry

Financial Security

Investing / Growing money

Feeling in Control

Sense of Accomplishment


…To staying on top of finances, which leads to feeling smart and responsible and achieving financial stability

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Benefits

Emotions

Personal Values

Maintain standard of living / have money

available

Less Stress/Less Worry

Financial Security

Investing / Growing money

Feeling in Control

Sense of Accomplishment

Staying on Top of it

Smart/Competent

Financial Stability



Unpacking the need to “stay on top of it”

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Staying on top of it has many components beginning with the basic need to engage, to understand and to monitor financial activities and gain knowledge. This reflects our shift from a more paternal defined benefits to a more individually-responsible defined contributions society.

Staying on top of it

Building knowledge

Keeping track

Tuning in

Customizing info

Developing personal network

Understand-ing

processes


Policy, product and marketing implications of the Search for Stability

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The financial anxiety many Americans feel and the associated search for financial stability create a different context for both the public and private financial sectors. The changed outlook and decision drivers suggest the need for new structures and approaches to giving people greater confidence about their financial decisions.

The following page briefly outlines three general ideas that come out of this research.


Policy, product and marketing implications of the Search for Stability

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1. Meet people where they are. Staying on top of it takes many forms and people create their own financial ecosystems. How can tools be customized to individual needs?

2. Support for staying on top of financial affairs. Financial decision making is work, one reason it is often avoided. Financial educators struggle with this problem. What mechanisms can help people tune in, learn, understand and evaluate their financial actions?

3. Support structure. Our Defined Contributions culture places more burden on individuals to manage their own affairs. There is a strong correlation between quality of support structure and financial stability. What approaches would help people recognize and build strong support networks?


Want more?

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MAPTM is an information resource designed to develop insights on important health and financial issues using the Artemis Motivation Research approach.

Seeking Stability in Changing Times is one of several current reports including The link between Health and Wealth, and The Landscape of Americans’ Financial Decision making (a research methods paper). Other planned analyses include:

Millennials and financial anxiety;

The impact of technology tools on financial decisions.

We use MAPTM insights to enrich our other assignments. Ask us.

seeking financial stability in changing times

Economy & Finance