Money Matters: Nearly Half of Americans Would Fail Financial ...

As millions of Americans continue to be unemployed and uninsured, a thorough understanding of personal finance is more important than ever. However, a National Foundation for Credit Counseling survey indicates that Americans come up short on managing their money.

The 2012 Financial Literacy Survey spoke with 1,007 adults over age 18 between March 16 and 19 about financial matters including budgeting, bills, debt, savings, spending, and credit.

While most people know the importance of something as basic as keeping a budget ? easier said than done, say more than half of survey participants admit they don?t keep track of their spending using a budget, and the same likelihood has held true for the last five years.

Budgets aside, paying bills on time is perhaps the first step in establishing financial responsibility, but 77 million Americans fail to do so. Blame the economy or just forgetful nature, but the inability to pay bills on time has increased from 28% in 2011 to 33% in 2012.

When it comes to living beyond their means, survey participants have shifted their attitudes about debt since last year, with 27% of survey participants saying they would initially ask friends and family for help alleviate debt. Last year, 8% of people would approach creditors for debt solutions, but that percentage has increased to 13% this year.

An additional sign of poor financial planning, 40% of participants are saving less, and 39% say they are not saving for retirement. The number of people actively saving has decreased since the 2010 survey, with 67% in 2010, 64% in 2011, and 59% in 2012.

When income doesn?t cover all the expenses, or when more financial emergencies popped up than the budget or savings allows, credit cards provide the financial cushion for millions of Americans. The survey indicates that about 39% of survey participants carried debt from month to month since 2010, but this year, the number of new credit card applications and rejections has increased. Concern over identity theft and credit scores has prompted more Americans to check their credit scores, but 44% have never reviewed this vital piece of financial information.

So, if given a self-assessment, who passes the financial literacy test? Forty-two percent of survey participants admit they truly don?t understand their own personal finances, and would give themselves a C, D, or F grade, and 58% would give themselves an A or B, compared to 65% who would have given themselves an A or B in 2010.

-Follow Elise Rambaud Marrion, @emarrion_cmn.

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