The National Foundation for Credit Counseling® released the results of the 2017 Financial Literacy Survey, now in its tenth year. Sponsored by Washington-based credit union, BECU, the survey found an increase in Americans’ credit card debt, decreases in the number of people with non-retirement savings and higher levels of concern about long-term financial stability, including retirement savings.
Saving and Retirement Pressure
A little over half of adults (54%) say they are saving the same as last year, slightly down by 4 percentage points from 2016. Those who say they are saving “more” remains unchanged since 2016 (26%). The proportion that has non-retirement savings has decreased slightly in the past year (68% vs. 69% in 2016).
Financial service providers can talk to consumers about saving for retirement now through informative ad campaigns. The new AudienceSCAN study showed 9.7% of U.S. adults set personal goals to be more proactive about planning for retirement this year.
Additionally, more than 1 in 4 U.S. adults (27%) do not save any portion of their household’s annual income for retirement, which holds steady compared to 2016 (26%) – continuing the trend of a large percentage of adults not funding this important life event. When asked what areas of personal finance are most worrisome, retiring without having enough money set aside was the top response, up significantly more than the previous two years (18% vs. 15% in both 2016 and 2015).
Retirement planners can reach consumers through direct mail campaigns. The new AudienceSCAN survey revealed 40% of retirement planners took action after opening ads/coupons in their mailboxes in the past month.
“The financial health of an individual can have large impacts on their community and beyond, both positive and negative, now and in the future. Ultimately, healthier individuals drive healthier communities long-term,” said Benson Porter, BECU president and CEO. “We continue to look for ways to encourage our members to take control of their finances and long-term savings. For example, early results of our financial health pilot program are promising. One-on-one sessions with BECU experts to promote taking action on saving and budgeting have resulted in increased emergency savings and net worth among participants.”
According to the new AudienceSCAN data, 20% of retirement planners will pay for financial/retirement planning services this year.
Credit Card Debt on The Rise
Compared to last year, significantly more U.S. adults indicate their household carries credit card debt from month to month (39% vs. 35% in 2016), with nearly two in ten adults saying they roll over $2,500 or more in credit card debt each month, up from 2016 (16% vs. 14% in 2016). Interest rate increases related to the recent Federal Reserve announcement will likely add to the cost of carrying credit card debt, which could increase financial pressures on families who are unable to find extra room in their budget to offset the impact of these changes.
Americans Spending Less
Reversing a trend that has been consistent since 2009, more U.S. adults are spending less than they were last year (26% vs. 23% in 2016). As more households carry costly credit card debt from month to month, spending could become a greater challenge as Americans try to pay off balances while working against a rising tide of interest and fees.
Student Loan Repayment
Although the percentage who said they would not recommend student loans as a way to finance college education remains the same as last year (11%), the percentage who said their student loan was a good investment has actually increased since 2015 and 2016 (now 9% vs. 6% in 2016 and 2015). A person’s confidence in their ability to repay a student loan is one possible factor in determining if borrowing is a good investment. More options for affordable repayment of student loan debt and the availability of nonprofit student loan counseling services may be among the factors influencing this positive trend. Last January, the NFCC launched the nation’s largest network of comprehensively certified student loan counselors to help those who struggle with repayment.
Seeking Financial Advice
It remains encouraging that a majority of U.S. adults (80%) agree that, considering what they already know about personal finance, they could still benefit from advice and answers to everyday financial questions from a professional. Additionally, if they were having financial problems related to debt, nearly one-quarter of adults, or almost 59 million people, indicated they would reach out to a professional non-profit credit counseling agency for assistance.