Lack of Savings Is Americans' Top Financial Concern
Apr 2nd 2013
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By Frank Byrt
Consumers admit they're in dire need of professional financial advice, at least according to 78 percent of those who participated in the 2013 Financial Literacy Survey conducted by the National Foundation for Credit Counseling (NFCC) and the Network Branded Prepaid Card Association.
The nonprofit organizations' seventh annual survey was conducted in the first week of March by Harris Interactive and released April 1 in conjunction with the beginning of National Financial Literacy Month. More than 2,000 US adults participated in the online survey.
"This year's survey results provided somewhat of a mixed message", said Susan C. Keating, president and CEO of the NFCC, in a press release. "More than one in four consumers indicated they are spending more than last year, yet 77 percent 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", Keating said.
Those surveyed admit they lack adequate financial planning skills. "Remaining stubbornly consistent over the past three years, 40 percent of US adults gave themselves a grade of C, D, or F on their knowledge of personal finance, thus it is not surprising that nearly four in five (78 percent) agree that they could benefit from additional advice and answers to everyday financial questions from a professional", NFCC said.
Indicative of the top concerns of consumers, having enough money to resolve daily emergencies takes precedence over long-term retirement, but "the good news is that 20 percent of those surveyed indicated they do not have any financial worries, a strong sign of consumer confidence", says NFCC.
Of those facing debt problems, 28 percent said they would first turn to their friends and family for assistance, while 27 percent said they would seek help from a professional, nonprofit credit counseling agency.
Following is a ranking of the concerns of those surveyed (respondents were allowed to give more than one answer):
1. Not enough savings: 57 percent said they're worried over a lack of savings, including forty-three percent who are concerned about not having enough "rainy day" savings for an emergency. Thirty-eight percent are concerned about retiring without having enough money set aside.
2. Not being able to pay financial obligations: 26 percent said they're worried about servicing their debt commitments, including concerns around paying credit card debt (13 percent); repaying student loan debt (8 percent); inability to make monthly vehicle payments (7 percent); and not being able to pay off existing medical debt (6 percent).
3. Health insurance: 25 percent are worried about health insurance - either not being able to afford it (19 percent) and/or not having any (17 percent).
4. Credit availability: 19 percent were worried about their credit score and/or lack of access to credit overall, including 16 percent who were anxious about their score and 9 percent with concerns about their lack of access to credit. However, 65 percent reported that they haven't reviewed their credit report, and 60 percent haven't reviewed their credit score in the past year.
5. Job loss: 18 percent said that losing their job was a major concern.
6. Foreclosure: Only 4 percent said they were concerned about foreclosure, which is a positive signal for the housing industry and the economy as a whole.