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Financial literacy survey shows consumers lack basic money skills

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A new financial literacy survey reveals a "disturbing" lack of knowledge pertaining to personal finance among U.S. adults.

The 2012 Consumer Financial Literacy Survey, released in April, Financial Literacy Month, found that despite the recession, Americans still lack basic money skills. More than half of the 1,007 adults polled for the survey admit to not even having a household budget.

Also revealed in the findings:

  • 33 percent, or more than 77 million Americans, do not pay all of their bills on time.
  • 39 percent of Americans carry credit card debt from month to month.
  • Only 59 percent of adults say they have savings -- a 5 percent decrease from last year.
  • More than one in four adults say they are now spending more than last year.
  • 42 percent of respondents give themselves ratings of C, D or F on their personal finance knowledge.

"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 National Foundation for Credit Counseling, in a statement released on the NFCC blog. "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."

The survey found that 55 percent of Americans now think it's acceptable to default on a mortgage if they can no longer afford the monthly payment, compared to 49 percent in 2011 and 46 percent in 2010.

This is the sixth year the NFCC has fielded a study to measure American adults' financial literacy. It did have a few bright spots. For instance, we're getting smarter about the need to be aware of credit scores. The survey shows that the percentage of adults who have ordered or received their credit score in the past 12 months has increased since 2011, and is now at 44 percent. That's an improvement, but still leaves a majority not knowing their credit score or credit report. At least we're aware of our ignorance. According to the survey, the main source of information about personal finance for Americans is their parents. According to the survey, though, still 4 out of 5 adults -- that's 80 percent -- say they could benefit from additional advice from a professional.

Methodology

The 2012 Financial Literacy survey was conducted by telephone within the United States by Harris Interactive on behalf of the National Foundation for Credit Counseling and the Network Branded Prepaid Card Association March 16-19, 2012, among 1,007 adults ages 18 and older. Results were weighted for age, sex, geographic region and race where necessary to align them with their actual proportions in the population.

See related: Financial literacy online resources for parents, children

Published: April 13, 2012


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