Key findings from the recently-released 2016 Financial Literacy Survey 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 percent in 2016 vs. 24 percent in 2015). The portion of those contributing income toward non-retirement savings has returned to its 2013 level of 69 percent. 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 10 adults are saying they roll over $2,500 or more in credit card debt each month, up from 2015 (14 percent in 2016 vs. 11 percent in 2015). With average credit card interest rates currently between 12 percent and 16 percent APR, this is a costly financial habit.
“Personal savings is the foundation for a stable financial future,” says Susan C. Keating, president and CEO of the National Foundation for Credit Counseling (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 percent) do not save any portion of their household’s annual income for retirement. Although this represents a significant decrease from last year (29 percent 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 percent) – down slightly from the last 3 years (60 percent in 2013, 59 percent in 2014, and 59 percent in 2015) – give themselves a grade of A or B on their knowledge of personal finance. Three in four adults (75 percent) agree – and nearly one in four (24 percent) 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,” says Benson Porter, BECU President and CEO.
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 percent) – or almost 54 million Americans– indicated that they would reach out to a professional non-profit credit counseling agency for help.
For more information, visit www.nfcc.org.
