Survey Reveals Consumers’ Top Financial Concerns
Although a lack of savings tops the list, consumer spending has increased.
As Financial Literacy Month begins, the National Foundation for Credit Counseling (NFCC) and the Network Branded Prepaid Card Association released the results of the 2013 Financial Literacy Survey. The survey, in its seventh year, annually provides data and trending around Americans’ attitudes and behaviors related to personal finance.
“This year’s survey results provided somewhat of a mixed message,” says Susan C. Keating, NFCC president/CEO. “More than one in four consumers indicated they are spending more than last year, yet 77% admitted to having financial worries, listing insufficient savings as their top financial concern.
"While consumers moving out of recession mode and becoming more comfortable with spending is positive for the nation’s economy, they need to be mindful of the fact that increasing spending without a safety net in the form of savings could have a negative impact on their personal economy.”
Regarding consumer responses around financial concerns, respondents were asked which areas of personal finance currently worry them the most, and were allowed to select multiple responses, with results as follows:
1. Not enough savings. Overall, 57% of Americans indicated they are worried over a lack of savings, including 43% who are concerned about not having enough “rainy day” savings for an emergency, and 38% concerned about retiring without having enough money set aside.
Although fairly evenly divided, the data suggest that having enough money to resolve daily emergencies takes precedence over the longer term retirement planning.
2. Not being able to pay financial obligations. A total of 26% of U.S. adults, or roughly 61 million people, are worried about servicing their debt commitments, including concerns around paying credit card debt (13%), repaying student loan debt (8%), an inability to make monthly vehicle payments (7%), and not being able to pay off existing medical debt (6%).
3. Health insurance. One in four U.S. adults are worried about health insurance – either not being able to afford it (19%) and/or not having any (17%).
4. Credit. While 19% were worried about their credit score and/or lack of access of credit overall, 16% were anxious about their score, with 9% concerned over their lack of access to credit, suggesting that consumers continue to realize the importance of credit in their lives.
However, most adults have neglected to review their credit report (65%) or score (60%) in the past year.
5. Job loss. Fear of job loss is a major concern for 18% of respondents, or more than 42 million Americans--a number that is disturbingly high.
6. Foreclosure. As the least of consumers’ concerns (among those listed), a comparatively small 4% of Americans are worried over losing their home to foreclosure--undoubtedly a positive signal for the housing industry and the economy as a whole.
The good news is that 20% of U.S. adults indicated they do not have any financial worries, a strong sign of consumer confidence.
When asked to grade their knowledge of personal finance, 40% of U.S. adults gave themselves a grade of C, D, or F—a persistent trend. It's not surprising that nearly four in five (78%) agree that they would benefit from additional advice and answers to everyday financial questions from a professional.
There's ample opportunity for consumers to improve their level of financial literacy and take steps to resolve their financial problems. While 28% of survey respondents said they would first turn to friends and family if they were having financial problems related to debt, 27% indicated they would reach out to a professional nonprofit credit counseling agency for help.
Harris Interactive conducted the online survey of 2,037 U.S. adults in March 2013, with 91 respondents affirming they regularly use prepaid debit cards. Figures for age, sex, race/ethnicity, education, region and household income were weighted to reflect actual proportions of the population. Also, as this marks the first time the survey wasn't conducted by telephone, propensity score weighting was used to adjust for respondents’ likelihood to be online.
When managing their money, convenience and safety were once again some of the top reasons cited by the 6% of Americans who typically use prepaid debit cards to pay for everyday transactions. Further, 81% said prepaid cards were a better value and cost less than using a credit card or debit card attached to a checking account.
Other prepaid card findings include: