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Financial literacy: What’s your grade?

More people are giving themselves higher marks for being money-savvy, but survey indicates many still need help.

By Karen Datko Apr 19, 2010 2:54PM

In the weeks preceding Financial Literacy Month, the fourth annual Consumer Financial Literacy Survey asked people to grade themselves. Are they getting smarter about money?


“In 2009, 41% graded themselves as C, D or F, with only 34% falling into that category in 2010,” says the National Foundation for Credit Counseling, which sponsored the survey.


The survey showed that people have gotten a bit more money-savvy in the last few years, but the results were a mixed bag. Considering that April is Financial Literacy Month, isn’t now a good time to take stock of yourself? Ask yourself these questions:


Do you budget? According to the survey results, 43% of respondents keep track of their overall spending, up from 39% in 2007. However, 56% don’t budget, and 5% don’t know how much they spend on food, housing, and entertainment and are generally clueless about where their money goes each month.


Do you have nonretirement savings? You know -- money that would come in handy if you were laid off or stuck in Europe by a cloud of volcanic ash. NFCC said 67% have savings readily available, up from 63% on 2007. However, 30% have no savings, and that number jumps to 39% for Gen Y adults. Only 24% of respondents said they’re saving more now because of the recession.


Do you pay all your bills on time? A total of 28% -- that’s 64 million people -- confessed that they don’t.


Among other findings:

  • 67% pay for most purchases with debit cards or cash, but 41% have credit card debt, and 5% carry a balance of at least $10,000 from month to month.
  • 65% haven’t ordered a free credit report in the last 12 months, and 31% don’t know their credit score, which means a surprising number do. Do you know yours?

Here’s another statistic that was less of a surprise: A third of the people who have a mortgage “say that the terms of their mortgage somehow turned out to be different than they expected.” Guess they didn’t read the fine print.

Also, “80% of adults feel there are situations where it is acceptable to default on a mortgage, and two of the top three most justifiable circumstances place the blame on the lender.”

You can find links to the entire survey report at this Web page.


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