67% of Middle Class Reports Making Really Bad Financial Decisions

September 24, 2012

By Katie Bryan, America Saves Communications Manager

Last week the Consumer Federation of America and Primerica found that two-thirds of middle class Americans acknowledge having made financial mistakes, often costly ones.

The new report also concluded that the financial condition of most middle class families is challenging. For example, in 2010 the typical middle class family had financial assets of $27,300 – including retirement savings but not pensions – which was 28 percent less than the $37,800 held in 2007.

Key findings from an analysis of the survey data included:

  • Two-thirds of middle class Americans (67%) said that, in the past, they had made at least one “really bad financial decision,” and nearly half of those questioned (47%) acknowledged that they had made more than one bad decision. The typical (median) cost of these bad decisions was $5,000, but the average cost was $23,000.
  • Few of these Americans said their main source of information or advice about specific financial decisions would be from the Internet, books, magazines, or TV. And a number said they would not seek information or advice in making these decisions. For example, for “saving and investing,” only 15 percent said they would rely on the Internet, publications, or TV for the information, yet another 17 percent said they “wouldn’t seek any information or advice, and just make a decision.” However, for this kind of decision, 45 percent said they would use information and advice from a financial professional.
  • Yet, large majorities of these Americans believe their ability to make financial decisions is “good” or “excellent” – for example, 81 percent for ability to budget income and 80 percent for ability to manage credit card debt though only 63 percent for ability to save for retirement and 67 percent for their ability to purchase a mortgage loan.

“Considering their past mistakes and the complexity of the financial services marketplace, we were surprised at how highly most middle class Americans rate their ability to make a variety of financial decisions and how infrequently they rely on information from the Internet and publications,” said CFA Executive Director Stephen Brobeck.

 

Take the Pledge

I pledge to save money, reduce debt, and build wealth over time. I will encourage my family and friends to do the same

Take the America Saves Pledge

Tip of the Day

  • Written by Administrator2 | March 19, 2014

    Having emergency savings may be the most important way to stay afloat financially http://ow.ly/r6i1n

Saver Stories View all »

Taking Back Control Over Finances

Written by Virginia Saves | August 5, 2015

After becoming a Virginia Saver and getting help from BankOn classes and coaching, Nadine Bialo took back control over her financial affairs.

Read more...

Starting Over

Written by Katie Bryan | October 28, 2013

Until last summer, Michael Lindman spent money freely. “I was a union truck driver for 35 years and had a good income,” said Lindman. “I owned my own home, saved a little, and tried to live within my own budget. You always think there’s going to be that much coming in, but things can change in a split second.”

Read more...

Saving Early: Key to Successful Future

Written by Katie Bryan | October 28, 2013

For Johnnie Lovett, a Young Illinois Saver, saving has been a habit since he was a teenager. “As a teenager, I was responsible for buying certain things with my allowance,”

Read more...

Receive Updates

Sign up for Texts

Written by Tammy G. Bruzon | July 15, 2014

Sign Up

Sign up for Emails

Written by Super User | September 16, 2013

Get Emails

Take the Pledge

Written by Super User | September 16, 2013

Start Saving