Financial Literacy Survey Exposes
Gaps In Grasp Of Personal Finance Skills


By Gail Cunningham

In recognition of Financial Literacy Month, the NFCC and the Network Branded Prepaid Card Association (NBPCA) released the results of the 2012 Financial Literacy Survey. In its sixth year, the survey annually provides data and trending around Americans’ attitudes and behaviors related to personal finance.

The 2012 survey revealed a disturbing lack of basic financial skills that are critical to building a stable financial future.  Consider the following results in areas such as budgeting, saving, responsible bill-paying, and money management: 

  • More than half of U.S. adults, 56%, admit that they do not have a budget;
  • One-third of U.S. adults, or more than 77 million Americans, do not pay all of their bills on time;
  • 39% of adults carry credit card debt over from month-to-month;
  • Two in five adults indicated that they are now saving less than they were one year ago, and 39% do not have any non-retirement savings; and,
  • 25% of those who do not currently have non-retirement savings indicated that, if they did begin to save, they would keep their savings at home in cash. 

“This year’s survey unveiled some disturbing trends, showing that a significant number of Americans are saving less, spending more, and carrying credit card debt over from month-to-month, suggesting that the painful financial lessons of the past are quickly being forgotten,” said Susan C. Keating, president and CEO of the NFCC.  “Coupled with the two in five adults who gave themselves a C, D, or F on their knowledge of personal finance, the need for an increase in financial education becomes not only clear, but urgent.”

For the first time, the 2012 survey evaluated consumer responses related specifically to prepaid debit cards and discovered the following:  

  • More than one in ten adults (13%), or about 30.5 million Americans, typically use prepaid debit cards to pay for everyday transactions such as groceries, gas, dining out, paying bills, and shopping online.
  • 78% of adults who use prepaid debit cards for everyday transactions say they use them because they are convenient;
  • 73% use prepaid cards because they feel the cards are safer than carrying cash;
  • 72% utilize prepaid cards because it allows them not to overspend or spend money they don’t have; and,
  • 56% find that the cards enable them to better manage their money.

“Consumers feel empowered using prepaid debit cards and revealed in the NFCC/NBPCA survey that the top three reasons for using the cards were their convenience, safety, and ability to control spending. Additionally, about three in four prepaid debit card users indicated they believed prepaid cards are a better value for their money compared to a credit card or debit card connected to a traditional bank account,” said Kirsten Trusko, president and Executive Director of NBPCA.

Methodology

The 2012 Financial Literacy survey was conducted by telephone within the United States by Harris Interactive on behalf of the NFCC and NBPCA between March 16 and March 19, 2012 among 1,007 adults ages 18+, of whom, 89 use prepaid debit cards for everyday transactions. Results were weighted for age, sex, geographic region, and race where necessary to align them with their actual proportions in the population. The full survey is now available in the Newsroom section on the NFCC website at www.NFCC.org.

Gail Cunningham is Vice President of Membership & Public Relations with the NFCC.

Views expressed are the personal views of the author, and do not represent the views of the National Foundation for Credit Counseling, its employees, its members, or its clients.

 

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