Are Americans Failing at Financial Literacy? Cindy Couyoumjian Discusses Further.
In this new economy, financial literacy has never been more important. For those that are unaware of the term, financial literacy is defined as the education and understanding of various financial areas, which enables a person to make informed decisions about their own finances. While making money is significant, figuring out how to manage that money is even more
vital. Unfortunately, studies show that two thirds of Americans do not know how to properly handle their finances. Cindy Couyoumjian is a Certified Financial Planner and the CEO of Cinergy Financial, a private financial planning firm based in Tustin, California. She has dedicated her career to creating investment opportunities for her clients and has seen first-hand the financial illiteracy that is rampant in the United States. Cindy Couyoumjian strongly believes that becoming financially literate — or at the very least, hiring a financial planner to help you — is imperative if you wish to be successful now and in the future. After all, high income doesn’t automatically translate to financial success. No matter your financial situation, everyone stands to benefit from learning how to properly manage their personal finances.
44% of Americans don’t Have Enough Cash to Cover a $400 Emergency.
What this means is that nearly half of Americans have less than $500 in the bank at any given time. Survey respondents said that if an emergency arose, most would have to use a credit card to pay it off or would be required to turn to selling items or taking a loan to obtain the money. Another issue is that the median out-of-pocket cost for an emergency medical expense is $1,000. Similarly, losing one’s job unexpectedly would be a devastating setback. Either of these situations would result in many Americans simply not being able to afford the expense. Cindy Couyoumjian asserts that this statistic only serves to underscore the importance of having an emergency fund, which would decrease the amount of credit card debt and provide more of a cushion for emergency situations that may arise.
43% of Student Loan Borrowers are not Making Payments.
There’s no denying that education is more expensive today than ever before. In fact, studies have found that tuition has skyrocketed by 213% in the past 30 years, strapping 22 million Americans with student loan debt. Of these 22 million students, nearly half are behind on their student loan payments or were allowed to postpone payment due to their economic circumstances. Cindy Couyoumjian claims that if students had more knowledge about post-graduation repayment plans prior to enrolling in university, they would be able to make better decisions when it comes to the right type of education — and student loan plan — for them.
41% of Households in the United States have Credit Card Debt.
According to recent studies, American households have an average of $5700 in credit card debt with an annual percentage rate (APR) of 16.4%. The debt is one thing, but the real killer is the interest, says Cindy Couyoumjian. Most people are unaware of the amount of interest they’re paying or that there are several management strategies that can ultimately reduce the amount of interest they pay.
14% of American Adults Have $0 Saved for Retirement.
Retirement might seem like it’s far off in the future, especially for millennials, but with increased healthcare costs, the near elimination of pensions, and the fact that we’re living longer lives, saving for the future needs to happen in the present. Beyond the Americans who have no money saved for retirement, 42% have less than $10,000 saved. In today’s economy, it is believed that most Americans will need $1 million in savings to retire and millennials will need an estimated $1.8 to 2.5 million. That is why Cindy Couyoumjian urges Americans to start saving early.
In conclusion, Cindy Couyoumjian knows that while financial literacy is not the easiest subject to understand, it is one that every adult should learn so that they can understand their financial position and how to increase their savings.