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Fin lit survey Consumers ready to spend lack finance skills
WASHINGTON (4/6/11)--Consumers are ready to begin spending again, reversing a trend of the past few years, according to the results of the National Foundation for Credit Counseling’s (NFCC) fifth annual Financial Literacy Survey released this week. But those same consumers admit they don’t trust their judgment when it comes to managing their finances. About 26% of U.S. adults report they are spending more than they did a year ago. At the same time, more than 40% of Americans grade themselves as C, D or F in their knowledge of personal finance, acknowledging that they lack the know-how to make sound financial decisions, said NFCC. “An admitted lack of personal finance skills coupled with increased spending is a recipe for financial disaster,” said Gail Cunningham, spokesperson for the NFCC. “The good news is that just over three in four, 76%, recognize that they could benefit from the advice of a financial professional. Hopefully, this indicates that Americans will take the steps necessary to improve their financial literacy instead of falling back into the financial sins of the past.” Credit card debt continues to plague consumers. Although more than two-thirds of adults pay for most purchases with cash or debit cards, two in five still carry monthly credit card balances. Consumers’ lack of sound judgment in regard to credit was reflected in recent comments made by the Amy Jo Johnson of the Credit Union Association of the Dakotas, Mid-America to The Bismarck Tribune (April 5). Johnson said her association is seeing more consumers go into debt simply because they don’t know any better. Consumers would make better choices if they were taught financial literacy in school, Johnson added. Credit unions nationwide are participating in financial education activities in recognition of April as Financial Literacy Month. The NFCC is offering the following initiatives:
* New online counseling request form. Recognizing the increased demand for counseling via the Internet, the NFCC retooled its online counseling request mechanism. * Debt Free Pledge campaign. During April, the NFCC is collecting pledges from consumers across the nation to become debt free. Consumers can visit the NFCC website to take the pledge, view the materials and find tips on becoming debt free. * Shred Your Debt Day. A recent Equifax study identified cities nationwide whose populations had the highest debt levels relative to their income. Wilmington, N.C. topped the list. In conjunction with Cintas Document Management and Equifax, the NFCC will host a series of monthly Shred Your Debt events in the cities identified as most in need of financial education, launching with the kick-off event at the Consumer Credit Counseling Service in Wilmington on April 30. * Shred Your Debt Contest. Cintas Document Management, Equifax and the NFCC are hosting an essay contest, with the winner receiving $2,000 to pay down their existing debt, a money coaching session with a personal-finance expert, the Equifax Debt Wise product and ongoing credit counseling with an NFCC Member Agency. Contestants submit an essay explaining their financial situation, and why they should win. * USA Today personal finance Q&A. The NFCC is teaming with USA Today to answer reader personal finance questions during the last week of April. Trained and certified credit counselors from NFCC member agencies will assist consumers with their financial concerns. * National Poster Contest winner announcement. Each year the NFCC hosts the Be MoneyWi$e National Financial Literacy Poster Contest to introduce school-aged children to financial literacy and offer them an opportunity to express their concepts through artwork. This year close to 1,800 students from grades three through 12 submitted posters around the theme of “Be a Superhero! Save Money!” The national winner will be announced and honored at the 2011 Jump$tart Coalition Awards Dinner in Washington, D.C. on April 13.
The Credit Union National Association is sponsoring the National Savings Challenge this month and National Credit Union Youth Week, April 17-23. For more information, use the link.
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