By Deanna C. White
There's little doubt most young adults are obsessed with their digital devices and the latest technology that helps them use those devices. In fact, three times as many young adults check their social media accounts daily as check their bank accounts, according to the results of a national telephone survey conducted for the American Institute of CPAs (AICPA) by Harris Interactive in recognition of National Financial Literacy Month.
According to the survey, more than half (54 percent) of 18- to 34-year-olds check their social media accounts at least once a day – 7.5 times on average – while just 17 percent check their bank accounts daily. Those that check their bank accounts daily do so three times on average, the survey found.
"The first rule of personal finance: 'Be informed,'" said Jordan Amin, chair of the National CPA Financial Literacy Commission. "It's easier than ever to spend – and it's just as easy to monitor your spending. In particular, young adults, who often have less in savings and large expenses as they begin careers and families, should check their bank accounts regularly to verify that transactions are processed correctly and ensure they're on track to meet financial goals."
Here are four tips the National CPA Financial Literacy Commission offers to adults – both young and old – on how to develop habits that promote greater financial awareness:
1. Plan "financial Fridays." Each Friday, stop by an ATM, log into your bank account, or call your financial institution to verify your balances and the accuracy of your transactions. This will give you a more informed start to the weekend, when you're more likely to have discretionary purchases. If you check in on the Internet, though, be sure to do so from your home – secure – network. And don't save financial passwords on your computer or mobile device. While it's important to stay on top of finances, you don't want a security breach.
2. Check your financial status. When checking your friends' social media status, take the time to check your financial status as well. Once a day, check your bank account register online or by phone to verify the accuracy of your transactions. This will help you spot any looming problems or discrepancies faster.
3. Set up text alerts with banks and credit card companies. When your balances reach predetermined thresholds, you'll get an automatic reminder to check in.
4. Set a recurring reminder. If applicable to your financial situation, use your calendar to remind you to check your retirement and other long-term financial planning accounts quarterly. You want to keep an eye on the performance of your portfolio to ensure you're moving toward your long-term financial goals.
But while routinely checking bank accounts is sound financial practice, Brian Greenberg, CPA, owner of the tax and financial services firm Brian Greenberg & Associates in Marlton, New Jersey, says an even more pressing issue is for young adults to understand the importance of reducing their debt burden.
Greenberg said he routinely sees young adults, who are fiscally and emotionally weighed down by huge monthly debt burdens, coming to the dawning realization that their starter salaries won't cover their debts.
"The first thing you have to do to be economically free is to be debt free. It's the bigger picture that people are losing sight of", Greenberg said. "You can check your account balance eight times a day, but it still doesn't mean you're doing the right thing to manage your debt. It's the low-hanging fruit that we need to go after and address."
The AICPA, in partnership with the Ad Council, has created the financial education program Feed the Pig, specifically for young adults aged 25 to 34. The centerpiece of the program is a the Feed the Pig website that offers free tips and tools to help young adults create budgets, boost savings, and navigate complex financial decisions.
Public service announcements featuring iconic "spokespig" Benjamin Bankes also air on TV and radio stations nationwide to help young adults gain a firmer financial footing. The program also offers weekly tips by e-mail or text message. To sign up, visit the Feed the Pig savings tips page.
Since 2007, the AICPA has conducted an annual survey of Americans to determine their top financial concerns and assess their financial well-being. Additional findings from those surveys include:
- One third, or 34 percent, of those aged 35 to 44 check social media accounts at least once per day.
- A quarter of seniors (65 and older) and adults with a high school education or less, never check their bank account balances.
- Four in ten adults report that they never check their retirement account balances.
- More than half of Americans (56 percent) believe that technology has made it easier to spend money, and only 3 percent say it's made it easier to save. Thirty-seven percent are split on the issue, saying technology has made it easier to both spend and save.
- If facing a financial crunch, Americans would rather change what they eat than give up their cell phones, downloads, or digital TV services. When asked to choose the one action they would most likely take in tight financial times, 41 percent said they would cut back on eating out, 20 percent said they would cut off cable TV, 8 percent said they would end cell phone service, and 8 percent said they would stop downloading songs and digital products.