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Consumers Don't Know Personal Finances

When we were in school, an average or failing grade would have meant big trouble for us at home, often resulting in our parents putting us into "time-out" -- and that may be just what some fiscally irresponsible adults need. An NFCC survey allowed consumers to grade themselves on their knowledge of personal finance, and 34 percent -- more than 77 million people -- gave themselves a grade of C, D, or worse, F.

Although the survey did show some improvements in consumers? personal finances, there are still serious deficiencies, which impact consumers? ability to properly manage their money in an economic crisis.

Consider that one-third of adults, or about 75 million people, don't put any part of their annual household income toward retirement.  Although remaining level since 2009, this figure increased by five percent since the 2008 survey -- putting consumers in danger of being ill-prepared for retirement.

Of further concern is the finding that 30 percent of adults report that they have no savings. These people are on a very slippery slope when emergencies pop up. Indeed, one in four say that if faced with an emergency, they would charge that expense to a credit card (25 percent) or take out a loan (29 percent), adding to their debt load with yet another bill.

It's no surprise that millions of adults struggle to pay their bills each month, with 28 percent admitting to not paying bills on time. The ramifications include negative marks on their credit reports and a lowered credit score. 

This is a very serious problem for two in five adults who report that their household carries credit card debt over from month-to-month, with more than 11 million indicating the amount of that debt to be $10,000.

Part of the silver lining is that consumers appear to be aware of their need for improvement in the area of financial education, with the survey showing that four in five adults agree that they would benefit from advice and answers to everyday financial questions from a professional. Hopefully, consumers will act upon this awareness. 

The NFCC stands ready to help consumers resolve their immediate financial concern, as well as equip them with the financial tools they need to live stable and successful financial lives in the future.

If you need help with your financial situation, reach out to a trained and certified counselor through an NFCC Member Agency. Or visit your on-base financial counselor for more advice.  

Visit Military.com's Banking and Savings channel to learn how to better manage your personal finances.

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Contributor

Gail Cunningham serves as vice president of membership and public relations for the National Foundation for Credit Counseling (NFCC), Inc. based in Washington, D.C. During over two decades in the industry, she has provided one-on-one financial counseling to thousands of consumers, and reached tens of thousands more through hosting television shows related to consumer education on cable and network television, as well as writing a weekly financial education column that appeared in multiple newspapers and online sites. She has been a featured financial expert for the nation’s top media outlets, including: NBC Nightly News, Good Morning America, the New York Times, the Washington Post, CNN, National Public Radio, USA Today, Newsweek, Forbes, Smart Money, MSN Money, Bankrate.com, the Associated Press, FOX Business Network and Bloomberg News.

National Foundation for Credit Counseling

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