The Sad State of American Finances
|May 19, 2009||Posted by Roshawn Watson under Uncategorized|
Harris Interactive recently released the 2009 Consumer Financial Literacy Survey. This survey sampled 1000 Americans over 18 years old between March 13-16. Their results demonstrate that most Americans have considerable financial deficiencies. Here are their revealing findings…
- 41% of U.S. adults gave themselves a grade of C, D, or F on their knowledge of personal finance.
- Less than half of adults keep close track of their spending, and several had no idea of food, housing, entertainment, and do not monitor their overall spending.
- I would argue that much fewer people rigorously budget than this study indicates.
- 57% of adults spend less than they were a year ago although 45% of those now spending less admit that if their financial situation were to improve, they would resume their previous spending habits.
- one-third of adults report having no savings, and only 23% save more than they did a year ago.
- 48% Generation Y adults have no savings.
- Not surprisingly, 55% say that they would borrow in the case of emergency.
Debt and Credit Card
- 26% admit to not paying all bills on time, and this rises to 51% of African Americans.
- 6% carry debt load of 10,000 or more and the same percentage have debts in collection and are now considering bankruptcy.
- I definitely believe this is underestimated as well.
- 64% have not ordered a copy of their credit report despite it being free, and this rises to 72% for Hispanics.
- 37% do not know what their credit score is.
- 42% of adults have a mortgage, and a little over one-fourth (28%) say that their mortgage terms turned out differently from their expectation.
- One-third of adults put no part of their annual household income towards retirement.
- 13% of adults have no medical insurance, and 65% of elderly adults have no long-term care insurance.
We have to do better, regardless of our income. Even a household making $40,000 per year will bring in over $2 million over the typical life-time, and to be financially inept is just irresponsible, especially now that we’re in the midst of a global financial mess. If anything, this survey is probably underestimating our financial dysfunction, since it relies on participants to self-report somewhat embarrassing (or at least non-flattering) details of their finances. However, these results will hopefully serve as our wake-up call. Otherwise, we have not learned the lessons that got us in this financial mess in the first place, which would be the true tragedy.
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Image Credit: Mario
Copyright 2012, Roshawn Watson, Pharm.D., Ph.D. All Rights Reserved.