Well over half of Americans (66%) check their bank account at least once per week. A similar majority (73%) also reported they carry two or fewer credit cards. (Lexington Law) Another 53% consider paying off debt a high priority. Surely, such signs are indicative of financial responsibility?
It seems not.
“For most, financial counseling falls on deaf ears before they have goals.
Account holders seem addicted to viewing their account balances. They may even be more proactive about limiting their lines of credit. However, the personal debt of an average American hovers around $38,000. Some other alarming facts include:
- 43% of Americans do not have money in any form of savings (Lexington Law)
- 54% do not check their credit score (Lexington Law)
- 10% of Americans have 5 or more credit cards (Lexington Law)
- Only 17 states currently require personal finance courses (CNBC)
- 48% of Baby Boomers are not on track to afford standard living expenses in retirement (AARP)
Americans realize financial literacy is an issue. Some 54% of consumers say they feel anxious about their financial situation. 52% report insecurity in their finances. Another 48% say they fear handling their money. (Northwestern Mutual)
Financial literacy advocates regularly suggest implementing personal finance courses as a solution. The idea is to require high school students to complete at least one class prior to graduation.
However, 2014 research from Harvard, Wellesley College and the Federal Reserve Bank of Chicago have shown personal finance courses for high school students have little to no effect on their future savings or investment habits. The majority of those who took a financial education course had forgotten what they learned in as little as 20 months. (Pacific Standard)
The trouble with current financial literacy programs, according to economist Lewis Mandell, is that financial education does not work if it is provided before it’s needed. For most, financial counseling falls on deaf ears before they have goals – such as eliminating debt.
Where Your Financial Institution Benefits
Despite their lack of knowledge, most Americans are still serious about getting a handle on their finances. In fact, 87% say nothing would make them happier than having stable finances.
Millennials are especially receptive to advice from their financial institution. One in three account holders younger than 40 report a high level of interest in receiving guidance for investments, retirement, creating household budgets, and saving for large purchases (J.D. Power).
Financial institutions willing to develop programs targeted at providing focused tips, courses, and information for these main economic arenas can generate trust, loyalty, and engagement with their account holders. And help set a lot of minds at ease.