Millions have serious difficulties paying bills each month, most notably those in generation Y. Only 59 percent, or roughly 23 million, of the young adults in generation Y (ages 18-29)pay their bills on time every month. That translates into millions of tomorrow's leaders, those who will drive the engine of our economy for years to come, who are not practicing a most basic financial principle. And the previous generation of consumers, those between ages 30 to 49, don't appear to be modeling good financial behavior either.
Only a minority keep close track of expenses/spending. Financial experts generally agree that having a household budget is sound financial management. But only a minority of Americans say they keep close track of their typical monthly expenses. And although a majority of the public has at least a somewhat good idea of where their money goes each month, nearly two in 10, or roughly 40 million adults, keep little or no track at all. Contrary to some stereotypes, how closely Americans manage their money does not vary by gender, age, income. Women continue to be as likely as men, younger people as likely as older people and lower income households as likely as higher income ones to keep close track of what they spend.
Savings and emergency funds are lacking. A majority of the public does not have a sufficient emergency fund, defined as three to six months of income saved. More than one-third, or roughly 76 million adults, say they don not have any nonretirement savings. And though a majority are currently saving for their retirement, more than one-quarter are not.
Few have ordered their credit report. Financial experts recomment that consumers check their credit history at least once a year. Yet, only a minority of Americans has ordered their credit report in the past year, in spite of the fact that it can be free. And one-third, or roughly 72 million adults, readily admit that they don not know their credit score.
Americans worry about future income growth; the midwest has greatest concerns. And matters are not likely to improve. Only one-quarter expect their income to outpace inflation. And more than half of all Americans believe their income will shrink, not keep pace with inflation or stay even.
Source: The 2008 Financial Literacy Survey, conducted by Princeton Survey Research Associates International on behalf of the National Foundation for Credit Counseling Inc. and MSN money.
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