ACCC says continued financial education important in economic recovery
November 19, 2020
(Boston, MA) – November 19, 2020 – The COVID-19 pandemic started as a health emergency and quickly became a financial threat as well. The pandemic has shown there is a lack of financial education among consumers. National non-profit American Consumer Credit Counseling (ACCC) says while financial literacy cannot help to predict when threats to consumers’ financial health will happen, financial education is still important in economic recovery.
“COVID-19 has made it apparent that there is a lack of financial literacy among consumers,” said Steve Trumble, President and CEO of American Consumer Credit Counseling. “Being prepared is vital when it comes to recovering from an unexpected financial hardship.”
According to the Council for Economic Education’s 2020 survey, 21 states require all high school students to take a personal finance class upon graduating. This is an increase of four states since 2018. The survey also found that five states still do not include personal finance education in their course standards for graduates.
“Financial education never stops. Consumers need to continue their financial education to ensure they know how to manage and protect their money,” added Trumble. “Financial education prepares people to face situations we are experiencing now and will also play a huge role in the recovery.”
The U.S. Department of Labor found that the unemployment rate is at 6.9 percent as of October 2020, which translates to 11.1 million. Although these numbers have fallen over the last couple of months, they are still almost twice the rates seen in February 2020 when 3.5 percent were unemployed. According to ACCC’s Third Quarter Financial Health Index, only 22 percent of those polled said they are “very confident” in their income security six months from now – a decline from 26 percent in June. A total of 10 percent said they have no confidence in their income security six months from now.
Financial strategies that are vital in protecting personal finances include:
- Budgeting – A budget is the cornerstone of responsible financial planning and allows consumers to see exactly how much money they have and where it is going each month. A budget can help consumers find ways to save money and plan for the future. Filling out a budgeting worksheet is a good start in creating a budget.
- Emergency Fund – An emergency fund is the best defense and readiness tool for unforeseen circumstances, such as a pandemic or job loss which many are experiencing now. When starting and building an emergency fund, consumers should aim to put five to ten percent of each paycheck into a separate emergency fund account. Cut back on unnecessary expenses, such as eating out or buying coffee, and put that money towards an emergency fund.
- Credit – Credit allows consumers to purchase items now and pay for them later. It is nice to have but knowing how to manage and maintain good credit can be challenging without knowing how it works. A consumer’s success in managing their credit is reflected in their credit report and score. ACCC has put together several informative articles on understanding credit reports, credit report dispute letters and more.
About American Consumer Credit Counseling
American Consumer Credit Counseling (ACCC) is a nonprofit credit counseling 501(c)(3) organization dedicated to empowering consumers to achieve financial management through credit counseling, debt management, bankruptcy counseling, housing counseling, student loan counseling, and financial education concerning debt solutions. To help consumers reach their goal of debt relief, ACCC provides a range of free consumer personal finance resources on a variety of topics including budgeting, credit and debt management, student loan assistance, youth and money, homeownership, identity theft, senior living, and retirement. Consumers can use ACCC’s worksheets, videos, calculators, and blog articles to make the best possible decisions regarding their financial future. ACCC holds an A+ rating with the Better Business Bureau and is a member of the National Foundation for Credit Counseling® (NFCC®). For more information or to access free financial education resources, log on to ConsumerCredit.com or visit http://www.consumercredit.com/financial-education.aspx