Have you received your tax refund yet? What do you intend to do with it? According to a survey conducted by the Association of Independent Consumer Credit Counseling Agencies (AICCCA), 60 percent of respondents said they planned to use their refunds to pay their bills or pay down their debt. Twenty-two percent said they planned to place their tax refunds into savings.
These findings correspond with an improvement in financial literacy, observed AICCCA president David Jones in a statement. “These results are a major plus and cause for hope that the fight for broad acceptance of the need for financial education is improving.”
But a different survey released in April (which, by the way, was National Financial Literacy Month as designated by the Senate in 2004) offers more troubling and contradictory attitudes and behaviors. The good news, according to the fifth annual Financial Literacy Survey conducted by the National Foundation for Credit Counseling, is that 76 percent recognize that they could benefit from the advice of a financial professional. The bad news is that 26 percent now report they are spending more than a year ago and falling out of the more conservative spending habits adopted during the economic downturn.
Further, the survey reveals, two in five Americans grade themselves as C, D or F in their knowledge of personal finance. Spending more, saving less, and carrying credit card debt are “a recipe for financial disaster,” noted NFCC spokesperson Gail Cunningham. Not surprisingly, nearly half of Americans are concerned about having insufficient retirement and “rainy day” savings.
Spectrem Group research finds that the wealthiest investors have more confidence in their financial acumen. Whereas 12 percent of Mass Affluent investors with a net worth between $100,000 and $1 million (not including primary residence) say they are very knowledgeable about financial products and investments, 26 percent of Millionaire households describe themselves as such, as do 31 percent of Ultra High Net Worth Investors with a net worth between $5 million and $25 million (NIPR), and $56 percent of $25 million Plus households. In 2009, 35 percent of UHNW households described themselves as very knowledgeable, suggesting that perhaps the recession was a reality check that maybe they didn’t know as much as they thought.