Middle Class Worried About Money

Half of middle-income Americans are worried about their finances despite having built up wealth during the economic boom that ended in 2001, new research shows.

Fifty percent of adult Americans with annual incomes between $25,000 and $75,000 said in a July survey that they were worried about their financial condition, and one in five within that group was very worried. The survey, released Monday, was commissioned by the Consumer Federation of America and Providian Financial Corp., a credit card issuer.

Some 69 percent of people surveyed with incomes under $25,000 said they were worried about their finances, while one-third of those earning over $75,000 said they were worried.

People who are anxious about their finances are likely to believe they have too little income or savings, and as unemployment has risen they also may be more concerned about losing their jobs, the survey found.

"The good news is that most middle-class Americans built greater personal wealth during the late 1990s," said Stephen Brobeck, the consumer group's executive director. "The bad news is that this wealth is not sufficient to meet major emergencies, let alone provide for a comfortable retirement. No wonder so many today are worried about their financial condition."

The two groups also made public an analysis of Federal Reserve household income data by Catherine Montalto, a consumer economist at Ohio State University. It showed that during the boom from 1995 to 2001, the net wealth of the typical middle-class household rose 23 percent, from $60,000 to $74,000. While stock holdings grew, stocks still represented a minor portion of net wealth for the typical middle-income family.

That meant that middle-class Americans were relatively unaffected by the stock market decline that began in early 2001, compared with affluent Americans - who suffered the greatest losses in stock values, according to Montalto's analysis.

Consumer Federation and Providian said they released the research in part to demonstrate the need for the free services of a program called America Saves, which helps people without savings to save and build wealth. The program offers consumers free services including workshops, coaching, savers clubs, advice from certified financial planners by phone or Internet, and low-balance, no-fee savings accounts at participating banks and credit unions. It is possible to enroll online.

The survey polled about 1,000 adults nationwide in July. The margin of error was plus or minus three percentage points.