Even though over a quarter of Americans admit to not paying their bills on time, that number may slowly be decreasing.
According to the 2016 National Financial Capability Study completed by FINRA Investor Education Foundation, 48% of Americans did not struggle to pay their bills within the past year. The survey polled 27,564 Americans nationwide.
This represented a jump of 12 percentage points from 2009 when the nation was in the middle of the Great Recession.
Additionally, the survey found 46% of participants were able to set aside enough money to last them through a three-month emergency fund, an 11 point increase since 2009. On top of that, more than half of all credit card users reported that they were able to pay off their credit card bills every month, the highest percentage since the start of the survey.
But some financial challenges continue to persist, especially for the young, the less educated, women, and minorities. A full 39% of blacks and 34% of Latinos admitted to borrowing loans with high-interest rates, compared to only 21% of whites and Asians respectively.
Women are more likely to put off going to a doctor, buying prescriptions, or undergoing a medical procedure because of expensive medical care costs, leaving more than one in five Americans with a staggering amount of unpaid medical debt.
Not to mention that nearly 20% of Americans age 18 to 24 admit to being in a severe debt hardship. Among those Millennials, 29% admitted to hardly paying off their mortgage, versus the 16% of those ages 35 to 54.
Plus, of those who did not have an education beyond high school, 45% said that they would be unable to financially support themselves for more than a few weeks without a job.
Gerri Walsh, president of the FINRA Foundation explains to USA Today, “The data tell us the what, but not the why. Access to traditional banking services can be one factor. Access to credit is also challenging. Even with the economy recovering, we’ve seen a tightening of credit, and so some individuals who might have been able to use credit cards to float past a financial shock might have to turn to other, alternative banking systems.”
Even worse, a good two-thirds of Americans are unable to pass a financial literacy test. Less than half of all survey recipients were even able to answer basic questions about financial risk. This number has been steadily decreasing since the financial crisis of 2009.
In his press release reported on Fortune, FINRA Foundation Chairman Richard Ketchum believes, “This research underscores the critical need for innovative strategies to equip consumers with the tools and education required to effectively manage their financial lives.”
So where does the country go from here? The Deutsche Bank predicts that there is a 60% chance of the United States falling back into a recession within the next few years. And while most Americans are slowly but surely Americans proving that they are focused on saving for the long-term, 40% are still shopping wildly, taking out cash advances, paying the minimum due balance on bills, and racking up debt.
For Walsh, it all buckles down to financial education. She urges that financial experts nationwide “need to work together with the private sector to make affordable financial products available, especially for the most vulnerable audiences, because absent that, people can find themselves in endless cycles of debt from which it’s difficult to emerge.