A recent survey revealed that there is a silver lining to America’s financial crisis. Americans are becoming more aware of how their spending and saving habits affect their lives. More consumers are keeping up with their credit card payments and other loans, as well as cutting back sharply on borrowing as they pay down their debt. In fact, consumer borrowing declined in February to $2.45 trillion. I know that sounds like a lot of debt, but revolving credit is decreasing at an annual rate of 13 percent. The less debt families have, the more they can save for their future.
With all this concern about personal finances are Americans improving their financial literacy? According to the results of this Consumer Financial Literacy Survey, there is a little bit of a mixed message but there’s definitely some positive changes happening in financial literacy.
The Good
- 23% of adults (nearly 52 million) are now saving more than they did a year ago because of the current economic climate.
- 57% of adults (more than 128 million) report spending less than they were a year ago.
- 80% of adults (180 million) agree that they would benefit from financial advice.
The Bad
- 7% of adults (nearly 16 million) don’t know how much they spend on food, housing and entertainment, and do not monitor their overall spending.
- 13% of adults (more than 29 million) do not have medical insurance.
- 26% of adults (more than 58 million) admit to not paying all their bills on time.
The Ugly
- 32% of adults (72 million) report that they have no savings.
- 33% of adults (more than 74 million) do not put any part of their annual household income towards retirement.
- 41% of adults (more than 92 million) gave themselves a grade of C, D or F on their knowledge of personal finance.
- 64% of adults (144 million) have not ordered a copy of their credit report in the past year, despite it being free.
Many Americans are open to learning more about financial literacy. Since its Financial Literacy Month, now is a good time to get started. Take a moment to review the Good, Bad and Ugly of your personal finances and make a change.
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