According to a recent survey of America’s “Financial IQ” by financial services provider Capital One Financial Corporation, nearly half (47%) of those surveyed said they are putting less money into savings and the same number (47%) report that current economic conditions have caused them to dip into their savings to cover day-to-day expenses. While a third of those surveyed (33%) said they save regularly every month, only 12% report that they are saving the recommended 10% to 15% of their income for the future, and another 12% are not saving anything at all.
According to the survey, the majority of Americans (59%) consider themselves to be highly knowledgeable or very knowledgeable when it comes to personal finance, a slight decrease from 64% in 2007. Nearly two-thirds (63%) of those surveyed say they are extremely comfortable or very comfortable managing short-term finances but only half (54%) feel comfortable managing long-term finances.
According to Capital One’s survey, the economy is clearly changing the way Americans manage their money. Nearly three-quarters of those surveyed (73%) said that current economic conditions have caused them to change their daily spending habits. Among other cost-saving strategies:
- 68% are eating out less often,
- 62% are cutting back on entertainment expenses,
- 54% are canceling or postponing vacation plans,
- 54% are clipping coupons
Nearly two-thirds (64%) are using budgets to manage expenses, but only a quarter (26%) modify their budget when an unexpected expense comes along. Americans are also regularly checking account balances for errors and recent activity with 32% of those surveyed checking weekly.
The findings are from a telephone survey conducted by the opinion research firm, Braun Research of Princeton, NJ. The survey entitled “America’s Financial IQ” was fielded from September 16-23, 2008. Braun Research completed 1003 interviews throughout the continental United States.