New Study Reveals That Americans Are Saving More but Lack Financial Knowledge
By Victor Ochieng
The Harris Poll recently conducted a study whereby it revealed that Americans have increased their non-retirement savings. The same study revealed that in spite of the increase in non-retirement savings, they still struggle with debt and long-term planning challenges.
The study, which was conducted on behalf of the National Foundation For Credit Counseling (NFCC) and the Boeing Employees’ Credit Union (BECU), shows that 26% of adults interviewed said they’ve realized an uptick in their non-retirement savings on 2015. Unfortunately, such savings aren’t safe as they’re threatened by high level indebtedness. To show just how bad the situation is, more than 1 out of 10 adults say they end up with credit card debt of $2,500 every month, which shows a rise on 2015 – 14% in 2016 vs. 11% last year. The report underlines that this trend is financially costly, understanding that credit card interest rates are currently somewhere between 12% and 16% APR.
“Personal savings is the foundation for a stable financial future,” says Susan Keating, president and CEO of the NFCC. “That foundation weakens as debt becomes unmanageable and balances are carried for extended periods of time. Those who are unable to make sufficient progress reducing their debt balances should seek the financial advice and tools they need to stabilize their finances and put a financial action plan in place to achieve future goals.”
From those surveyed, 75% agree and 24% strongly agree that they can benefit from expert advice on everyday financial questions. Only 56% of those interviewed confidently give themselves A or B on matters financial knowledge.
“Although slightly more than half of all Americans feel financially literate, there remains a significant portion who believe they lack the knowledge to be confident in their financial decisions,” says Bruce McClary, vice president of Communications at NFCC.
Unfortunately, even some who’ve got financial knowledge don’t apply that knowledge. Nevertheless, implementing one’s financial knowledge and sticking to healthy financial habits can open doors for more affordable credit facilities.
When you save and go into debt at the same time, you aren’t doing any good to your financial life. It’s good to save while also significantly cutting down on your debts to ensure that your savings remain safe.
Retirement savings are also in the areas of serious concern, the study reveals. It states that of those surveyed, 26% don’t spare anything on their annual income for retirement savings, a percentage researchers have termed as “alarmingly high.”