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Study Finds ‘Mum’s the Word’ When It Comes to ‘Money Talk’

Americans are increasingly looking to their partners for financial security, yet a new study finds that they are tight-lipped when it comes to discussing their own finances.

Respondents in a nationally representative survey of mass-affluent Americans rank nearly all major relationship milestones ahead of discussing their finances, including meeting the family, being intimate, traveling together and discussing politics.

They reportedly even postpone “money talk” with their significant others, with the majority admitting they rarely talk about their:

  • debt (60%);

  • salary (57%);

  • investments (55%); or

  • spending habits (51%).

These findings come from the latest Merrill Edge Report, which reveals Americans’ increasingly complex relationship with their money, significant others and financial futures.

On the bright side, mass-affluent Americans’ quest for financial security is prompting them to save more, according to the findings. Respondents report they are “willing” to set aside an average of $18,000 annually on saving and investing, more than they spend on rent and mortgage payments ($16,000), their children’s education ($12,000) or travel ($8,000).

Additionally, 24% of respondents say nothing is constraining their ability to save for the future, while 73% think they can have everything they want in life if they save and budget accordingly.

Yet even though respondents say they are saving more, that does not equate to planning. The majority say they have no monetary goal in mind for many of life’s major milestones.

For retirement, half of respondents say they have no goal in mind. And of those who do have a “magic number,” nearly 80% report they are saving for less than $1 million. Moreover, respondents even believe that their planned retirement age will change an average of 15 times throughout their lives.

In addition, more than two-thirds of respondents (67%) are unsure how much they should save before having a baby, getting married (64%), sending children to college (54%) or making a downpayment on a house (51%).

Next-gen Finances

Meanwhile, new and emerging technologies may be the solution to planning shortfalls. Respondents are increasingly embracing artificial intelligence (AI) in their financial lives, with nearly half (49%) already comfortable with AI providing financial guidance, managing day-to-day finances (49%) and making investments (47%).

Many also predict that in the next five years, the investment guidance they receive will be primarily via digital channels (74%); mobile trades will be the norm (69%); and fewer than 20% of trades will occur on the Stock Exchange floor (63%).

“Perhaps this rapid adoption and reliance on technology will inspire Americans to take action and plan for their financial futures,” notes Aron Levine, head of Consumer Banking and Merrill Edge.

Convergys conducted on behalf of Merrill Edge a nationally representative, panel-sample online survey Sept. 27-Oct. 13, 2018, consisting of 1,034 mass affluent respondents throughout the United States.