40 Percent of Americans Slacked Off Financially Last Year, HSH Poll Reveals

HSH PollA recent report by mortgage information resource website HSH.com revealed earlier this week, that there were a lot of so-called “financial slackers” in the mortgage market, meaning consumers who did not refinance or prepay their mortgages in 2014.

According to a recent survey by the company, about 40 percent of 1,906 respondents said that they did not refinance their existing mortgage or make a prepayment on it, nor did they make plans to pay off credit card debts, improve their FICO credit score, or save for their retirement nest egg. There may be many more consumers sitting on the fence in 2015, as 30 percent said that they do not plan to do any of these things in the current year. The “financial slackers” pertained to by HSH also included the 39 percent of respondents who took only one action out of the ones listed above.

There are a lot of possible reasons why there were a lot of consumers who “slacked” in 2014, including the simple fact that a lot of those surveyed may not even have a credit card debt or mortgage to worry about, or are already retired and have saved up enough money for the “golden years.” As HSH pointed out, these individuals are the exception, rather than the norm.

The company cited Atlas Financial founder and lead adviser PJ Wallin, who referred to the phenomenon of “financial slacking” as “analysis paralysis,” or people being too much of perfectionists to get started on their plans of doing something about their financial situation. He was also quoted as saying that some consumers try too hard to refinance, save money or pay debts – this sort of overthinking, he says, may “prevent even conscientious people from moving forward.”

As for refinancing mortgages, Wallin told HSH that many consumers suffer from the “set it and forget it” mindset. This basically covers borrowers who chose not to refinance their mortgages as they were already content with their monthly payments, or were waiting and seeing in hopes of their home values appreciating to the point where they can refinance at 80 percent equity, without having to pay mortgage insurance.

Only 15 percent of the 825 consumers who said that they have a mortgage said that they refinanced in 2014, while 9 percent said that they are planning to do so in 2015. That is despite mortgage rates being substantially lower than they were one year ago, and expected to stay reasonable for most of the current year.

Going forward, there are certain tools that “slackers” can use to motivate themselves to improve things financially. Wallin said that water cooler discussions or “cocktail party chatter” could be a key – in other words, pressure from friends and family. “You hear somebody else did it and you think maybe you should think about doing it too,” he commented. Another tool would be self-motivation, according to Serenity Financial Consulting financial planner Alan Moore – he believes people who want to improve financially, have to ask themselves what motivates them when it comes to other goals and use these motivations to help themselves financially.