CINCINNATI, April 1, 2016 /PRNewswire/ -- Debt is a
buzzword for politicians, a burden for students, a necessity for
most homeowners and a reality for 70 percent of Americans.
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But despite this fact, 30 percent of those in debt have no plan
to pay it off, according to a recent survey conducted by Fifth
Third Bank (NASDAQ: FITB).
Fifth Third commissioned the national survey to examine the
financial beliefs and behaviors of American adults. The results
provided a snapshot of our nation's financial literacy, with 82
percent of respondents citing financial independence as a goal in
their lives. The survey also revealed how the three largest
generations in America differ in their understanding and management
of savings, budgeting, retirement planning and credit.
"At Fifth Third, we were curious to discover how knowledgeable
Americans are about their personal finances," said Jada Grandy, senior vice president and Community
Reinvestment Act strategies director, Fifth Third Bank. "The
results of this survey give insight into financial literacy in
America, as well as the needs of customers at different key stages
of their lives. This knowledge arms Fifth Third with the tools to
support our customers at every step on their journey to financial
independence."
The survey, commissioned in recognition of National Financial
Literacy Month, revealed the following insights about American
financial literacy:
Americans are confident in their financial expertise.
Forty-eight percent of Americans consider themselves to be
financially savvy. Based on survey questions examining financial
savings and planning, many have the right to be confident.
- Forty-five percent of respondents know 20 percent of income
should be set aside for savings.
- More than half1 of those surveyed know an emergency
fund should hold six months of living expenses.
- Forty-six percent of Americans agree retirement savings should
begin in a person's 20s.
But that knowledge isn't reflected in real-life
decisions.
With high marks for understanding financial
concepts, Americans have the know-how to make informed decisions.
Unfortunately, they aren't applying the perceived understanding to
their own finances.
- Forty-seven percent of respondents frequently live paycheck to
paycheck.
- Two-thirds2 of Americans don't have six months of
savings in their emergency fund. Thirty percent don't have an
emergency fund at all.
- More than half3 of respondents don't contribute to a
401K, IRA or other retirement plan.
Debt reflects the priorities of each generation.
One
in four survey respondents feel they are in "financial hardship"
from their debt. While credit card payments are the top identified
debt across all age groups, the second highest debt for each
generation reveals interesting insights into their priorities.
- Thirty-nine percent of millennials have student loan debt.
- Thirty-seven percent of Generation X respondents are paying off
car loans.
- Thirty-four percent of baby boomers are still in debt for their
mortgage.
Americans aren't ready to retire.
Eighty-four percent
of Americans know their retirement savings should reflect their
age, expenses, standard of living and health status, yet only
half4 know the exact amount of their current retirement
fund. Concerning trends from each generation show retirement may be
a rocky road ahead for the majority of Americans.
- Two-thirds5 of baby boomers, those currently
reaching retirement age, are in credit card debt.
- Those on the tail end of Generation X will begin retiring in
the next 15 years, but two-thirds6 don't see themselves
in excellent financial standing for the milestone.
- Only 36 percent of millennials know how much money is saved in
their retirement account.
"It's encouraging to see that Americans are generally
knowledgeable about basic finance concepts," said Grandy. "However,
there is a clear gap between understanding savings, budgeting and
debt relief tactics and implementing them in one's life. Learning
how to transfer financial management from a textbook to a personal
bank account is the key to empowering oneself financially."
A leader in financial empowerment, Fifth Third Bank provides its
L.I.F.E. (Lives Improved through Financial Empowerment®) programs
at no cost to individuals at all ages and stages of life.
Fifth Third's L.I.F.E. programs include:
- Young Bankers Club®: The Fifth Third Bank Young Bankers
Club introduces financial concepts to fifth-grade students,
including foundational knowledge about how money is earned,
budgeting and the importance of saving for the future.
- Dave Ramsey's Foundations
in Personal Finance®: Fifth Third Bank is the exclusive
sponsor of this industry-leading financial curriculum for high
school students in the Bank's 12-state footprint. The program is
taught by school teachers who are aided on video by Dave Ramsey, one of America's most trusted
financial experts, and his team. The course covers saving and
budgeting, credit and debt, financial planning and insurance, and
income, taxes and giving.
- Financial Empowerment Mobiles: Traveling throughout the
Bank's 12-state market, the Fifth Third Financial Empowerment
Mobiles, also known as eBuses, reach individuals and neighborhoods
in low- and moderate-income neighborhoods. In partnership with
community organizations, the eBuses provide many services,
including credit counseling, job search assistance, tax
preparation, budgeting assistance and access to financial products
and services.
- Empower U®: Originally developed as a service to Fifth
Third business clients for their employees, Empower U is a
financial planning program that is also now available in the
community. Empower U is taught by Fifth Third employee volunteers,
and classroom topics include identity theft protection, college
savings strategies, homeownership achievement and more.
For additional L.I.F.E. resources, including Fifth Third's Top
10 Steps to Financial Empowerment, visit
https://www.53.com/life.
About Fifth Third Bank
Fifth Third Bancorp is a diversified financial services company
headquartered in Cincinnati, Ohio.
The Company has $141 billion in
assets and operates 1,254 full-service Banking Centers, including
95 Bank Mart® locations, most open seven days a week, inside select
grocery stores and 2,593 ATMs in Ohio, Kentucky, Indiana, Michigan, Illinois, Florida, Tennessee, West
Virginia, Pennsylvania,
Missouri, Georgia and North
Carolina. Fifth Third operates four main businesses:
Commercial Banking, Branch Banking, Consumer Lending, and
Investment Advisors. Fifth Third also has an 18.3% interest in
Vantiv Holding, LLC. Fifth Third is among the largest money
managers in the Midwest and, as of December
31, 2015, had $297 billion in
assets under care, of which it managed $26
billion for individuals, corporations and not-for-profit
organizations. Investor information and press releases can be
viewed at www.53.com. Fifth Third's common stock is traded on the
NASDAQ® Global Select Market under the symbol "FITB." Fifth Third
Bank was established in 1858. Member FDIC
Copyright © 2016 Fifth Third Bank, Member FDIC, Equal Housing
Lender, All Rights Reserved.
1 55 percent of respondents know how much money is
recommended for an emergency fund.
2 69.3 percent of respondents do not have six months of
living expenses saved in an emergency fund.
3 55.2 percent of respondents do not contribute to a
401K, IRA or other retirement plan.
4 49.9 percent of respondents know how much money is
currently in their retirement account.
5 69 percent of baby boomer respondents are in credit
card debt.
6 70 percent of Generation X respondents did not agree
with the statement "I consider myself in excellent financial
standing for
retirement."
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SOURCE Fifth Third Bank