There are few types of survey in this world more reliable than those carried out by insurance companies. When your company’s continued existence depends upon the quality of your information, you tend to make very sure that your data is solid.
So Allianz Insurance’s “LoveFamilyMoney” study on the impact of family structure on financial wellbeing is sobering reading, despite the almost hilariously upbeat tone of the press release.
The study, which was conducted in January, is based on a sample of 4,500 “middle-class” US residents (defined as having a household income of $50K or more), compared the “traditional family” (a married couple with at least one child under 21 living in the household) with six other kinds of “modern family” including single parents, same-sex couples, and “blended families” where parents are living with at least one child from a previous relationship.
I’ll let the study speak for itself:
Despite a stronger economy, today’s American families, and in particular “modern” families with a nontraditional structure, are struggling in ways never seen before. Even though 85% of the more than 4,500 Americans polled in LoveFamilyMoney, a new Allianz study, identify themselves as “middle class,”—a status that has traditionally afforded a level of financial security— a staggering 57% of modern families say that they are either “making ends meet,” “struggling financially,” or “poor,” a full 10 percentage points higher than their traditional family counterparts. Moreover, 49% of modern families say that they currently live paycheck to paycheck, versus 41% of traditional families, and 25% are not saving any money at all.The Allianz LoveFamilyMoney Study was designed to seek insights into the financial needs of today’s families, which have reached unprecedented diversity. Today, just 19.6% of U.S. households are married heterosexual couples with children, a big shift from the 40.3% of traditional families counted in 1970. The study revealed surprising differences in the financial security of traditional versus modern families, providing the financial services industry with compelling evidence of the need to tailor products to the needs of specific family structures.
There’s more:
“New family structures have a direct impact on a family’s relationship with money and finances—and we found that, while modern families have similar strong emotional ties, they often feel financially less secure than their traditional counterparts,” said Katie Libbe, Allianz Life vice president of Consumer Insights. “While family structure plays a prominent role, our study of these different modern family cohorts uncovered a number of unique insights into each group’s attitudes, perceptions and beliefs around money and financial planning.”Just 30% of modern families felt a high level of financial security, versus 41% of traditional families. The split becomes more pronounced when looking at financial hardships. Nearly 36% of modern families have collected unemployment, versus only 21% of traditional families. And 35% of modern families have unexpectedly lost a main source of income, compared with 23% in the traditional category. Moreover, twice as many modern families have declared bankruptcy versus traditional families (22% compared with 11% of traditional families).Modern families also struggle with their financial futures. Only 34% of modern families believe that they have “excellent/above average” financial planning knowledge/expertise, compared with 44% of their traditional counterparts. And only 51% of modern families (versus 60% of traditional families) think that they are on track to achieve their financial goals. The reason? Fifty-eight percent of modern families say that covering current expenses takes priority over planning for the future.
Allianz say they’re going to release more info from the LoveFamilyMoney survey as time goes on, and I look forward to it.
There are lots more questions to be asked. It would be very interesting, for instance, to find out how many ‘traditional families’ versus ‘modern families’ have households incomes above $50k per annum in the first place.
It’d also be important to differentiate the outcomes for individual forms of family: lumping in six different ones under “modern families” seems a bit hazy, and including the following forms as “modern” rather than “traditional” seems quite odd, and might skew the data somewhat – very possibly against traditional marriage:
Multi-Generational Families — Three or more generations living in the same householdOlder Parent with Young Children Families — Parents age 40+ with at least one child under five in the householdBoomerang Families — Parents with an adult child (21-35) who left and later returned to rejoin the family
But even with these provisos, if the data is accurate then the sruvey seems to be a solid endorsement of the traditional family as a force for financial security and stability, regardless of the spin Allianz wants to put on. To ignore this in making policy decisions seems extremely foolhardy.
Read Allianz’s press release here [1].
(Via Rod Dreher)