NEW YORK (MainStreet) If you are looking to fix your financial situation, simplify. Americans who have rebounded the fastest from the recession have reduced the complexity of their money matters. A survey of 1,242 U.S. consumers conducted by Aite Group and Chase Blueprint says the financial health of U.S. households is closely linked to the complexity of their personal financial situations.
Of those surveyed whose financial health has declined since the recession, 31% said their financial life is very complex, citing a variety of financial penalties and multiple loans. Yet, of those who say their financial health has improved since the recession, 43% say the complexity of their finances has decreased.
Borrowing money seems to make matters worse for those working to fix their finances. From 2008 to 2012, the number of consumers who took out payday loans, direct deposit advances and small loans increased. In fact, half of the consumers whose financial health declined since the recession borrowed from friends and family in 2012, up from 34% in 2008.
"Reducing financial complexity is crucial for consumers looking to recover from the recession," says Aite Group senior analyst Ron Shevlin. "Consumers who borrow from multiple sources find their financial lives to be complex, but those who use tools to help them manage their spending and borrowing make progress in simplifying their finances."
What are the keys to a personal economic rebound? Among the roughly quarter of consumers who say their financial health has improved since the recession, approximately 60% pay their credit card balance in full nearly every month. That's up significantly from 2008, when just 43% paid their balance in full.