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A survey of Americans' budgeting and spending habits released today found that fewer than half have ever ordered their credit reports, just 40% use monthly budgets and nearly a third don't know the interest rates on their credit cards.
The survey of 1,003 Americans was conducted by Princeton Survey Research Associates International on behalf of the National Foundation for Credit Counseling, or NFCC, a nonprofit association of community counseling services. (Counselors from NFCC member agencies answer MSN Money readers' questions on the Ask a Credit Counselor message board.)
Though the survey revealed some large gaps in Americans' financial literacy, nearly half saw no need for further financial education. But a full third expressed a desire to learn more.
"The new Princeton Research survey results indicate that consumers are interested and willing to learn. The NFCC feels that education is an important first step in its commitment to creating a national culture of financial responsibility," said Susan C. Keating, the NFCC's president and CEO.
Where Americans fall short
Some highlights from the survey:A majority doesn't keep close track of expenses. Just 40% of those surveyed said they have a budget to track typical monthly expenses. Although a majority of people have at least a somewhat good idea of where their money goes each month, more than two in 10 keep little or no track at all, the survey found. Women are as likely as men, younger people are as likely as older people and lower-income households are as likely as higher-income ones to keep close track of spending.
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A sizable minority pays less than the full amount on credit cards every month. Roughly four in 10 credit card holders said they do not or cannot pay the full amount due every month on the credit cards they use most often. This was particularly true of younger Americans, blacks, Latinos and lower-income Americans, the survey found. Roughly three in 10 credit card holders do not know the interest rates on their credit cards.
On the plus side, 59% of credit card owners reported that they usually pay the full amount rather than incur interest and finance charges.
Less than half of Americans check their credit histories. As new threats of identity theft surface, financial experts recommend that consumers check their credit histories at least once a year. Yet less than half of Americans have ever ordered a credit report. (See "How to get a credit report for free.") On a positive note, the majority of people who have ordered their credit reports have done so at least every couple of years and said they understood their report. Notably, those who know they can get credit reports for free are twice as likely to order them and order them more frequently, the survey found.
More get financial education at home than school. Nearly two-thirds said they learned about financial issues such as managing money, balancing a checkbook and building their savings in their home when they were growing up, while less than half said they learned about managing money in school. And those who keep a budget were more likely to say they learned a great deal about financial issues in their home. One in four said they learned nothing at all about finances in school.
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Who wants more financial education? Three in 10 people surveyed said they are interested in learning more about financial issues or seeking professional advice in the next year, particularly Americans 18 to 29, blacks, Latinos and people living in the South. Half said they would turn first to a spouse, parent, relative or friend for financial advice. A third said they did not know where to turn.
More than one-third have received help from pros. In addition to talking to family and friends before making a major purchase, more than one-third of those surveyed have sought professional financial advice. More than half said the advice was provided by a financial adviser or planner. About one in 10 saw a credit counselor, and similar numbers got help from accountants, bank or credit unions.
The survey was conducted March 20-28 and has a margin of error of plus or minus 3 percentage points.
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