Any progress being made with savings is possibly at risk due to increases in the number of those who are carrying balances on their credit cards.
Washington, DC (PRWEB) April 25, 2016
The National Foundation for Credit Counseling® (NFCC®) and BECU, the nation’s fourth largest not-for-profit credit union, have released the results of the 2016 Financial Literacy Survey. Conducted online in March and April 2016 on their behalf by Harris Poll, the survey includes responses from more than 1,600 U.S. adults ages 18 and over. In its tenth year, the report provides a fresh look at the American consumer’s level of knowledge as it relates to financial literacy, as well as trends associated with personal finance behavior.
Key findings this year indicate that Americans are sharpening their focus on personal savings, with slight increases among those who say they are saving more than last year (26% in 2016 vs. 24% in 2015). The portion of those contributing income toward non-retirement savings has returned to its 2013 level of 69%. Whatever progress is being made with savings is possibly at risk due to increases in the number of those who are carrying balances on their credit cards. According to the 2016 data, more than one in ten adults are saying they roll over $2,500 or more in credit card debt each month, up from 2015 (14% in 2016 vs. 11% in 2015). With average credit card interest rates currently between 12% and 16% APR, this is a costly financial habit.
“Personal savings is the foundation for a stable financial future,” said Susan C. 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. Our national network of trusted nonprofit agencies stands ready to serve those who would benefit from professional guidance.”
The future is a concern for Americans, as secure retirement remains among the areas at risk for many households. About 1 in 4 U.S. adults (26%) do not save any portion of their household’s annual income for retirement. Although this represents a significant decrease from last year (29% in 2015), the percentage of those who do not save any amount is still alarmingly high. For those who say they have financial concerns, retiring without having enough money set aside was the top response.
A little over half of U.S. adults (56%) – down slightly from the last 3 years (60% in 2013, 59% in 2014, and 59% in 2015) – give themselves a grade of A or B on their knowledge of personal finance. Three in four adults (75%) agree – and nearly one in four (24%) strongly agree – that they could benefit from advice and answers to everyday financial questions from a professional.
“We are encouraged by the slight increases in U.S. savings rates, however, it’s clear that we still have more work to do to improve the financial health of Americans nationwide,” said Benson Porter, BECU President and CEO. "At BECU our focus is on supporting the financial well-being of our members and the community at large and research like this helps us better understand the challenges consumers are facing. This deeper insight will allow us to combine educational outreach with new products and services to help them overcome these obstacles.”
As consumers continue to strive toward greater financial stability, it is important that they know where to turn for guidance. Roughly one in four (23%) – or almost 54 million Americans – indicated that they would reach out to a professional non-profit credit counseling agency for help.
The full survey is available in the newsroom of the NFCC website.
About the Survey
The 2016 Financial Literacy Survey was conducted online within the United States by Harris Poll on behalf of the National Foundation for Credit Counseling® (NFCC®) and BECU between March 22 and April 6, 2016 among a nationally representative sample of 1,668 adults ages 18+, and an oversample of 321 adults ages 18+ who reside in Seattle, WA. Figures for age, sex, race/ethnicity, education, region and household income were weighted where necessary to bring them into line with their actual proportions in the population. Propensity score weighting was used to adjust for respondents’ propensity to be online. Prior to 2013, this survey was conducted by telephone.
Founded in 1951, the National Foundation for Credit Counseling® (NFCC®) is the nation’s first and largest nonprofit dedicated to improving people’s financial well-being. With 600 member offices serving 50 states and Puerto Rico, our NFCC® Certified Credit Counselors are financial advocates, empowering millions of consumers to take charge of their finances through one-on-one financial reviews that address credit card debt, student loans, housing decisions and overall money management. Make one of the best financial decisions of your life. For expert guidance and advice, call (800) 388-2227 or visit nfcc.org today.
BECU is a not-for-profit credit union owned by its members. Profits are returned to the members in the form of better rates and fewer fees. With more than 950,000 members and more than $14 billion in assets, BECU is the largest credit union in the state of Washington and one of the top four financial cooperatives in the country. BECU currently operates over 40 locations. All Washington state residents are eligible to join.