The study, funded by American Express, the Ford Foundation and the MetLife Foundation, found that 43% of those surveyed have a difficult time keeping current with bills and credit card payments.
Jennifer Tescher, president and CEO of the CFSI, said that making strides toward greater financial health would involve analyzing “consumer preferences, behaviors, and pain points” to better understand the root problems preventing people from achieving financial success. “This study reveals significant opportunities for policymakers, nonprofit organizations, and financial service providers to create real solutions and empower millions of Americans to live healthy financial lives,” said Tescher.
Improving financial health doesn’t necessarily mean making more money, said Courtney Kelso, a vice president at American Express. Kelso stressed that American Express is focused on helping consumers make better decisions with their money through tools and features offered in conjunction with the American Express Serve prepaid card, as well as an innovation lab that helps folks set goals, track, and manage their financial lives.
The study, titled Understanding and Improving Consumer Financial Health in America, provides insight into specific behaviors and attitudes that contribute to better financial health. These include:
- Planning ahead for large expenditures. People who do this are 10 times likelier to be financially healthy than those who don’t.
- Being in the habit of saving. Those who regularly set aside money for savings are four times more likely to be financially healthy than folks who don’t save.
- Having confidence in money savvy and abilities. People who agreed with the statement, “I am confident that I can meet my long-term goals for becoming financially secure” were more likely to be financially healthy; less than half of those surveyed agreed with the statement.
- Being satisfied with their financial standing. People who were financially healthy were more likely to be satisfied and report less stress around money matters.
Key findings included:
- 74% of consumers said they have a savings account, but more than half aren’t in the habit of saving.
- 43% of respondents do not budget their money, but more than half of those who own a prepaid card product report using it to help them budget.
- 77% of prepaid card users said they use the card because it allows them to spend only what they have, and not go into debt.
Ray Boshara, director of the Center for Household Financial Stability at the Federal Reserve Bank in St. Louis, said the CFSI study provides a framework for improving the financial health of consumers. “By revealing how consumers behaviors, attitudes and outcomes interact, CFSI has broadened our vision, as well as our pathways, for achieving consumer financial success,” he said.
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