CUs can bridge gap between consumer confidence, expertise on finance
April 7, 2015
WASHINGTON and SAN FRANCISCO (4/8/15)--When it comes to their finances, it turns out that Americans might be overly optimistic about their futures, according the National Foundation for Credit Counseling (NFCC) and NerdWallet 2015 Financial Literacy Survey--providing credit unions with an opportunity to help align consumers' expectations with reality.
In the survey, 92% of Americans said they were very or somewhat confident in their most recent big financial decision, such as picking a credit card, buying a car or refinancing a mortgage. As many as 59% of consumers said they deserve an "A" or "B" when it comes to their own personal financial knowledge.
But, at the same time, nearly 70% said they are currently worried about their finances. A full 60% said they spend money each month without a budget, and more than one in five (21%) say they are spending more than they did in 2014.
While 57% of Americans are saving for their retirement and 66% maintain non-retirement savings, 28% of Americans are worried that they do not have enough savings.
"Many Americans are spending their adult lives slowly chipping away at a mountain of student loan debt only to find themselves approaching retirement later in life with little or no savings," said Susan C. Keating, NFCC president/CEO. "The stakes are too high for consumers to let misplaced confidence get in the way of sound financial decisions."
Among those currently repaying student debt for themselves or their children, most (58%) said they're unable to set up emergency or retirement savings accounts or buy a car because of the financial commitment to the loans.
"These findings portray a bigger picture of the financial literacy knowledge Americans lack today," said Cliff Goldstein, a personal finance analyst for NerdWallet. "When we asked respondents where they save or invest their money, we were shocked to find out that, although 65% of Americans use a savings account, less than three in 10 use potentially higher-yielding investment vehicles such as a 401(k) (29%) or IRA (25%)."