NFCC, NerdWallet: U.S. consumers are confident today … too confident

Too many U.S. consumers continue to live without a budget.

Too many U.S. consumers continue to live without a budget.

by Dan Rafter

What provides the best boost for retailers? Confident consumers. But what about consumers who are overconfident? What impact will they have on the retail sector?

It’s a question that commercial real estate pros will have to face, because it seems that U.S. consumers today are overly confident about their financial health and, at the same time, unprepared for the future.

That’s the bad news from a recent study from the National Foundation for Credit Counseling and personal finance Web site NerdWallet. The companies’ 2015 Financial Literacy Survey found that 92 percent of respondents said they were very or somewhat confidence in their most recent big financial decision, anything from picking a credit card to buying a car or refinancing a mortgage loan. A total of 59 percent of respondents said that they deserve either an “A” or “B” when it comes to their personal financial knowledge.

When NerdWallet and the National Foundation for Credit Counseling delved deeper into the actual financial decisions that consumers made, they found cause for concern. A total of 60 percent of respondents said that they spend money without following a household budget. One in five respondents said that they are spending more money today than they did in 2014.

Only 49 percent of respondents said that they pay off their credit-card balances each month, while 24 percent said that they routinely pay their credit-card bills late.

Student-loan debt continues to be a serious issue, too. The survey found that 58 percent of respondents who are repaying their own student loans or those of their children are not able to establish an emergency fund, save for retirement or purchase a car because of this financial commitment.

Less than three in 10 respondents said that they use 401(k) accounts or IRAs to save or invest money. A total of 65 percent of respondents said that they used savings accounts for the bulk of their savings.

“These findings portray a bigger picture of the financial literacy knowledge that Americans lack today,” said Cliff Goldstein, personal finance analyst for NerdWallet, in a written statement.

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