Two in five Americans give themselves a C, D or F on their understanding of personal finance, according to a new report from the National Foundation for Credit Counseling. The annual survey also made several other disturbing findings: One in three adults have no savings, and among those between the ages of 18 and 34, almost half have no savings. 28 percent of those surveyed said their mortgage terms turned out to be different than they expected. And one in three Americans don't put any of their income towards retirement.
Financial literacy has been a hot topic ever since the financial crisis started, with many lawmakers calling for a great emphasis on financial education. (The NFCC says it would like to see required "pre-purchase counseling" for first-time home buyers, among other policy changes.)
Rep. Eddie Bernice Johnson, D-Texas, a longtime advocate of financial literacy, said that she used to charge $2,000 to $3,000 a month on her American Express card -- a habit she changed after realizing "it was not the thing to do." Johnson recalled that her father always said, "Whatever you earn, save something." Now, Johnson follows that advice herself, and automatically deducts savings from her account each month before she can spend it. She also passes on advice to her grandsons: She tells them that for every dollar they spend on credit cards, you end up spending $1.25 (including interest).
Other survey findings include:
- 57 percent of Americans do not have a budget.
- One in four adults do not pay all their bills on time.
- Even though it's free, two-thirds of adults have not ordered a copy of their credit report in the last year.