U.S. adults rate poorly in money matters
By Jennifer Wirth
Florida Today
When it comes to financial matters, Americans seem to be in dire need of a refresher course.
A new nationwide survey of 1,000 adults gave Americans a D in money matters, with an average score of 67 out of 100 percent. They were graded on their responses on such questions as "Have you prepared a will?" and "Do you have an emergency fund?"
Despite the results, six in 10 Americans said they felt in control when dealing with their finances, and seven in 10 said they were satisfied with their personal-finance situation and believe they are good-to-excellent at managing their own money.
The study, conducted for Bankrate.com, a personal-finance Web site, by RoperASW, showed that while the public is basically aware of what the fundamental smart-money moves are, they aren't practicing them.
"There's a gap between attitude and action," said Elisabeth DeMarse, president and chief executive officer of Bankrate.com. "The relationship people have with money is very psychological, and we're not always rational when it comes to money matters."
For example, 93 percent of those polled agreed that it's very important to pay bills on time to avoid late fees, but only 80 percent actually do it all the time.
Experience is definitely a factor, DeMarse said, citing that the older poll respondents tended to score much higher than the younger folks.
"The people over 50 clearly showed that they have learned the benefits of saving and that it's better to be a careful planner, rather than a spontaneous spender," DeMarse said.
Lack of time seems to be an issue with many of those surveyed. More than half said they felt that if they had more time, they could get their finances in better order.
Dawn Spaccio of Indialantic, Fla., said setting time aside for financial planning is something she makes a priority.
"Everyone should make time for going over their finances on a regular basis because it pertains to your future," Spaccio said. "It's going to be here sooner than you think, and you have to have a plan for it."
The survey also asked participants to name their biggest financial fears. At the top of the list is that terrorism will weaken the United States economy, with 79 percent saying that is one of their fears. Other major fears include lack of savings; not having enough money put away for an emergency; losing their job; that their employer will decrease their benefits; that their home will lose its value; and that they will not be able to pay their mortgage or rent.
"People are most nervous about the idea of losing their home. Anything that puts that in jeopardy makes them very anxious," DeMarse said. "My best financial advice would be look at your mortgage and refinance because studies show that 70 percent of all mortgages could benefit from a refinance."
But Ron Seiwert, who owns a $100,000 home in Merritt Island, said he is one of the few that would not benefit. Seiwert recently made improvements to his property, including adding a 1,200-square-foot addition.
"Refinance is great for those living in a house that they don't plan to do major renovations on," Seiwert said. "If I tried to refinance, there would be a new appraisal, and because I've done so much since I bought the home, it would be appraised at a much-higher price and my taxes would go way up."
Another area of concern, DeMarse said, pertained to the question of having an emergency fund.
The survey results showed that while 66 percent of Americans know that keeping an emergency fund is very important, only 40 percent are actually doing it. DeMarse recommends saving $100 a month.
"A lot of people feel like they can't afford that, so they should put away $50, and, after a year, you'll be on your way," she said.
