Americans are getting a handle on their debt in the short term, but long-term financial planning still needs some work, according to a new study. The Consumer Financial Literary Survey conducted this year shows that consumers are bringing their credit debt under control, but are still struggling with preparing for the future. This points to a need for increased financial education, according to some experts. Michigan consumers may be interested in some of the conclusions reached as a result of the study.
The study, which polled Americans across the country, has revealed that the overall number of households that carry a monthly balance on credit cards has dropped from 44 percent in 2009 to only 34 percent this year. However, the same study reveals that over half of all Americans do not actually adhere to a monthly budget. Additionally, roughly 15 percent of those polled still carry a minimum of $2,500 on their credit cards from month to month.
This speaks to improved financial performance in the short term, as individuals are discharging accrued debt more quickly. However, 32 percent of individuals are afraid that they will not have enough money for retirement or to provide for a "nest egg" in case of emergencies. This means Americans as a whole may still have a ways to go before they can be considered truly financially literate.
Michigan residents are well aware of the kind of toll a fragile economy can take on individuals and businesses. While the drop in credit debt signifies a step in the right direction, more work needs to be done to further lower that number. Residents facing heavy debt may benefit from researching alternative debt reduction options, including consolidation of debt and personal bankruptcy relief.
Source: acainternational.com, "Fewer Households Report Month-to-Month Credit Card Debt", , April 20, 2014