By: Daryl Tolliver
Recent studies have shown that when it comes to managing their money, most Americans wish their financial professionals - such as a bank or credit union representative - would step in and provide resources to help them improve their condition. A separate report demonstrates the reason additional support may be necessary: nearly four-fifths of the American population admit to making key money mistakes.
This data comes from financial services firm Edward Jones, which revealed that 79 percent of individuals say they have made some type of error that has or continues to impact their finances. For example, 26 percent report not saving enough for retirement, while 20 percent said they fail to track their budgetary spending. Another 13 percent said they have taken on too much debt. Most Americans want to improve their finances and establish a savings safety net to help them live comfortably. This is perhaps the reason that "Improving personal finances" generally appears as the No. 1 New Year's resolution most Americans make each year. However, financial literacy tests conducted among nearly all age groups shows that the majority of individuals lack the knowledge and resources they need to make sound financial decisions.
Making a difference in how customers, members manage their finances
Community banks and credit unions often do their part to explain their financial products to customers and members to help them gain more value from these offerings. Providing more context in the way of financial education programs, web resources and online tools can also make a great deal of difference in helping explain why certain products are in their best interest. For example, a person whose goal is to save more money may be well-suited for a rewards checking program that offers cash-back benefits. As community banks and credit unions continue to offer these programs, they can explain to potential enrollees that any cash rewards provided for everyday spending can go toward a savings account, paying off debt or saving for retirement. Providing small tips on how to maximize rewards or manage income can also be helpful.
"For the one-fifth of Americans who admit to not paying enough attention to their expenses, a very simple step could be to skip that $3 coffee in the morning or think twice about that second night of takeout and instead allocate that money to a long-term savings platform," said Scott Thoma, investment strategist for Edward Jones. "Every little bit really does count when you're talking about investing for future financial goals."