The writer is the communications director for the Better Business Bureau’s Upstate New York office.
This month marks National Financial Literacy Month and a good time to reassess your savings and spending patterns. The FINRA National Financial Capability Study recently looked at the spending and saving habits of Americans and came up with some startling information. The Better Business Bureau invites consumers to consider the following highlights from the study:
• Most Americans lack emergency savings or “rainy day” funds. Only 49 percent of survey respondents reported that they had set aside funds sufficient to cover expenses for three months in case of sickness, job loss, economic downturn or other emergency.
• The majority of Americans have not done any retirement planning. Only 42 percent of the FINRA survey respondents who weren’t retired said they had taken the time to calculate what they would need.
• Well below half of Americans have saved money for college. Only 41 percent of those who have financially dependent children have set money aside for college education.
To help you build a brighter future for yourself and your family, BBB recommends the following:
• Start calculating now. You are never too young to start planning for retirement. While individuals increasingly have to take responsibility for their financial security after retirement, the majority of Americans appear not to have done any retirement planning. Decisions about how much to save in order to afford a comfortable retirement require collecting information about several important variables (including Social Security and retirement plan benefits) and doing some, even rudimentary, calculations.
• Budget appropriately when it comes time to pay for a child’s education. It is widely reported that, over the past decade, tuition and fees at four-year public colleges and universities have increased more rapidly than they did during the 1980s or 1990s, rising by an average of nearly 5 percent each year (adjusted for inflation). With this trend unlikely to abate, an average American family with children can expect to dedicate a sizable share of their resources to paying college tuition.