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Holiday Bills Bring Added Stress for Financially Underserved Americans
Think Finance Launches First-Ever Underbanked Financial Sentiment Index

November 14, 2011

FORT WORTH, Texas – November 14, 2011 – With the holidays almost here, unbanked and underbanked Americans are feeling extra financial pressure and anxiety about having enough money to pay for gifts, according to the first-ever Underbanked Financial Sentiment Index released today by Think Finance, a developer of next-generation online financial products that help people manage life's everyday expenses. The Index is designed to gauge perceptions of financial security among unbanked and underbanked Americans, representing one in four U.S. households according to the FDIC, yet a frequently overlooked portion of the U.S. population.

More than half of people surveyed (56 percent), said they do not expect to have enough money set aside to cover holiday expenses and 59 percent indicated that increased financial pressures around the holiday season made them wish they could skip the holidays altogether. As a result, financially underserved consumers are trying to limit the blow to their budgets. Seventy-seven percent of respondents plan to keep gift purchases to a minimum, spending only $500 or less, and the same number said they will spend less on gifts than they spent last year.

"Many of us feel financial stress around the holidays, but for those who are already struggling, this can be a particularly difficult time of year," said Ken Rees, CEO of Think Finance. "Underbanked and unbanked consumers trying to keep up with holiday expenses need flexible, innovative financial products to help them manage through times like these when they are financially stretched."

Underbanked Consumer and Economic Sentiment

The dreary response to holiday spending plans is reinforced by findings on unbanked and underbanked consumers’ perception of their overall financial condition. Thirty-four percent of respondents said they are barely getting by and 39 percent said they are stretched, but managing to pay for necessities. More than three-quarters (77 percent) said they have cut back on overall spending due to the tough financial times of the last few years.

Survey respondents reported that the top financial concerns keeping them up at night were paying for basic necessities (35 percent), having money set aside for emergencies (28 percent) and paying off debt (26 percent). Saving for retirement and college tuition came in low on the list of concerns at nine and one percent respectively. The report’s findings indicate that many financially underserved Americans are living paycheck to paycheck. Forty-six percent of those surveyed said they would only be able to cover expenses for two weeks if they lost their source of income.

The index also asked respondents about their general expectations for the U.S. economy and found a gloomy outlook among the financially underserved. Seventy-three percent of respondents expect the national economy to stay the same or get worse over the next year while 27 percent reported a positive outlook for the economy. However, unbanked and underbanked Americans showed optimism when it came to their personal financial outlook for the coming year with 44 percent expecting to be in better shape, 40 percent expecting to be in the same financial shape and only 16 percent expecting to be in worse financial shape one year from now.

About the Survey Respondents

The Underbanked Financial Sentiment Index surveyed 500 adults who earn an annual income lower than $50,000, use alternative financial services and play a significant role in making household financial decisions. Respondents reported using a variety of alternative financial services over the past 12 months including checking account overdraft protection (44 percent), prepaid debit cards (37 percent), bank direct deposit advance (32 percent), money transfer services (28 percent), check cashing services (23 percent), payday loans (16 percent) and rent-to own agreements (9 percent). When asked what improvements respondents would most like to see in traditional financial products, the clear choice was lower fees (74 percent).

The Underbanked Financial Sentiment Index was conducted online within the United States by Toluna Inc. on behalf of Think Finance. The survey was fielded over the course of six days in October 2011.

About Think Finance

Think Finance is a leading developer of next-generation financial products for underbanked consumers. The company’s products provide increased convenience, transparency and value to the millions of consumers whose needs are not being met by traditional banking products. Think Finance is privately held, with offices in Fort Worth, Texas and the United Kingdom, and is backed by some of Silicon Valley's most respected venture capital firms including Sequoia Capital and Technology Crossover Ventures.