By Bruce McClary
The National Foundation for Credit Counseling (NFCC) and BECU, the nation’s fourth largest not-for-profit credit union, have released the results of the 2016 Financial Literacy Survey. Conducted online in March and April 2016 on their behalf by Harris Poll, the survey includes responses from more than 1,600 U.S. adults ages 18 and over. In its tenth year, the report provides a fresh look at the American consumer’s level of knowledge as it relates to financial literacy, as well as trends associated with personal finance behavior.
Key findings this year 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% in 2016 vs. 24% in 2015). The portion of those contributing income toward non-retirement savings has returned to its 2013 level of 69%. 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 ten adults are saying they roll over $2,500 or more in credit card debt each month, up from 2015 (14% in 2016 vs. 11% in 2015). With average credit card interest rates currently between 12% and 16% APR[i], this is a costly financial habit.
The future is a source of concern for Americans, as secure retirement remains among the areas at risk for many households. About 1 in 4 U.S. adults (26%) do not save any portion of their household’s annual income for retirement. Although this represents a significant decrease from last year (29% 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%) – down slightly from the last 3 years (60% in 2013, 59% in 2014, and 59% in 2015) – give themselves a grade of A or B on their knowledge of personal finance. Three in four adults (75%) agree – and nearly one in four (24%) strongly agree – that they could benefit from advice and answers to everyday financial questions from a professional.
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%) – or almost 54 million Americans – indicated that they would reach out to a professional non-profit credit counseling agency for help.
The 2016 Consumer Financial Survey is available for download here.
An infographic of this year’s survey is also available here for downloading and sharing.
[i] Calculation based on U.S. Census Bureau’s 2012 Current Population Survey (CPS), which estimates there are 234.72 million adults ages 18+ residing in the United States: 234.72M x 0.23 = 53.99M.