BOSTON (9/5/13)--More than 80% of U.S. citizens surveyed admit that they would rather pay down their debts than save for their future, according to a recent online poll conducted by American Consumer Credit Counseling (ACCC).
"With outstanding consumer debt surpassing $2.8 trillion, Americans are being forced to choose between paying down rising debts and saving for a healthy financial future," said Steve Trumble, ACCC president/CEO. "Although diminishing credit card debt is important, a balance must be struck between preparing for financial downturns and limiting the amount of debt that you hold."
The survey also found that 58% of consumers do not regularly deposit money into a savings account--a risky financial move that could land consumers further into debt.
Of the 397 consumers surveyed in the recent ACCC web poll at ConsumerCredit.com, 83% say paying down credit card debt is more important than putting away funds for a rainy day or future investments such as retirement or their children's education. Also, 27% of those surveyed confessed that they hold over $20,000 in credit card debt, which typically holds the highest annual interest rate.
ACCC's national survey also found that 25% of respondents reported they simply do not earn enough money to stash away any savings for the future, while only 6% confessed that their excessive spending habits restrict their ability to save.
There are several steps that can help consumers pay down their debts, while stowing away money for future financial security, said ACCC. Some initial steps that consumers can take include:
Create a budget to see what your total monthly financial commitments look like and then list all your debts from lowest to highest, organizing debt by the highest interest rates.
Pay off an entire balance. It's really a matter of choice when it comes to choosing to either pay off the lowest debt or tackle the card with the highest interest rate. However, many consumers reap an emotional reward when they can quickly pay off an entire balance, which often motivates them to continue.
Pay only the minimum amount on other debts while you are trying to pay off your targeted debt payment and, if possible, always pay more than the minimum to pay off that debt faster.
Cut back on any non-essential expenses such as entertainment, and utilities such as cable while trying to pay down debt and save for the future. Apply this extra savings to the targeted debt payment.
Include a savings column in your budget, even if it is as little as $5, and put that money aside in a separate account.
Don't give up. Proper planning and realistic goal-setting will lead to financial success.
The saving and debt repayment poll is the latest in a series of ACCC web surveys for 2013 that focus on financial education, budgeting and planning topics. The online survey can be found using the link.
Credit unions in several states run prize-linked savings programs such as Save to Win to encourage members to save money.