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BBB: Financial Literacy Month

Wednesday, April 25, 2012

The FINRA National Financial Capability Study recently looked at the spending and saving habits of Americans and came up with some startling information.

Have questions for Steve Bernas of the BBB? Email him at abc7@chicago.bbb.org

The Better Business Bureau serving Chicago and Northern Illinois is sharing the findings to help consumers make smart financial decisions.

"It's National Financial Literacy Month, so it's a good time to reassess your savings and spending patterns to build a brighter future for yourself and your family," said Steve J. Bernas, president & CEO of the Better Business Bureau serving Chicago and Northern Illinois. "Knowing about recent spending trends is a great way for anyone to consider alternative ways to save or use their money."

The BBB shares the following results to consumers:

Most Americans lack emergency savings or "rainy day" funds. Only 49-percent of survey respondents reported having set aside funds sufficient to cover expenses for three months in case of sickness, job loss, economic downturn or other emergency.

The majority of Americans have not done any retirement planning. Of respondents who weren't retired, only 42-percent of the FINRA survey said they took the time to calculate what they would need later in life.

Well below half of Americans have saved money for college. Only 41-percent of those with financially dependent children have set money aside for college education.

The BBB recommends the following to consumers looking to improve their financial planning:

Start saving now. You are never too young to start planning for retirement. While individuals increasingly have to take responsibility for their financial security after retirement many Americans appear not to have done any retirement planning. Decisions about how much to save in order to afford a comfortable retirement requires collecting information about several important variables, including Social Security and retirement plan benefits. Consider consulting with a financial planner. Free business reviews on Financial Planning Consultants are available at www.bbb.org

Budget appropriately when it comes time to pay for a child's education. It is widely reported that, over the past decade tuition and fees at four-year public colleges and universities have increased more rapidly than they did in previous decades. With this trend unlikely to abate, an average American family with children can expect to dedicate a sizable share of their resources to paying college tuition. Consult with your bank or financial institution about options available to save for the future including section 529 programs or U.S. saving bonds toward education.

Manage your debt. One of the best ways to ensure a brighter financial future is to manage and eliminate costly debt. The BBB offers -"Managing Credit Made Simpler," an online learning tool for consumers and small business owners.

Avoid "get rich quick" schemes. The BBB exposes scams and frauds every day. Many of these are aimed at investors trying to make money. Research any company before investing or doing business for free at www.bbb.org


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