Cardone Addresses the Need for Greater Financial Literacy Among Consumers
eConsumer Services® CEO Gary Cardone recently lent his insight and decades of business experience to a guest column for Home Business Magazine, the publication for aspiring entrepreneurs.
In his August 23, 2016 piece, Cardone cited a disturbing new statistic from the FINRA Investor Education Foundation: nearly two out of three U.S. consumers cannot pass a basic financial literacy test.
Troubling Economic Signs
The FINRA National Financial Capability Study showed that 63% of respondents missed two or more questions on a five-question test of basic financial literacy. Unfortunately, the additional data collected as part of the study seems to reinforce that lack of consumer understanding of finances:
- 18% of participants spend more than they earn
- 26% have used non-bank borrowing, such as payday loans or pawn loans
- 32% make only the minimum payment on their credit card balance
- 54% have no savings in the event of an emergency
These and other indicators revealed in the study demonstrate that American consumers are in desperate need of greater financial literacy.
“The results are alarming when you consider that some analysts are predicting the United States has a 60% chance of entering another recession within the next year,” Cardone explained. “It’s critical for consumers to have basic understanding of personal finance, and those who don’t are at greater risk of becoming mired in debt…”
Hope is Not Lost
Fortunately, as Cardone explains, “…it’s never too late for adults to brush up on their financial knowledge.”
There are a number of resources available to consumers to help insulate against future market shocks. This way, consumers can ensure that they will be in good financial order, regardless of what may come. Everything from financial institutions and adult education to advocacy groups like Consumer Action are at the public’s disposal.
With the world’s economic situation uncertain, it’s now more important than ever that consumers educate themselves to make sound financial decisions.