Earlier this year, U.S. consumer debt reached $4 trillion for the first time ever-- with one trillion of that figure consisting of credit card debt alone, also a record high. Debt isn’t inherently bad if you have a plan to pay it off without incurring interest charges. But paying down loans competes with other financial priorities, like saving for retirement and creating an emergency fund. So, it’s no wonder that 40 percent of all Americans can’t cover a $400 financial emergency without borrowing money or selling something. Unfortunately, living paycheck-to-paycheck while struggling to pay off debt and grow their savings account is the reality for many Americans.
The Great Recession saw millions of Americans lose their homes and their retirement savings. It also created a generation of Americans who are likely to be worse off financially than their parents. One of the very few silver linings from the Great Recession was that it caused people to rethink their spending habits. However, as the economy has continued to pick up steam over the past few years, it seems these lessons are fading. A recent AICPA survey found that the percent of Americans following a monthly budget has declined from 58 percent in 2015 to 39 percent in 2018. And with that stat in mind, it’s not surprising that the percent of Americans putting less money on their credit card now compared to before the recession has decreased from 50 percent in 2015 all the way down to 30 percent last year. What if the only thing people needed to stay on track with their finances was consistent motivation?
A grassroots effort of the nation’s CPAs
The AICPA and our volunteer members across the country have been at the forefront of the movement to empower Americans to make better financial decisions. Through our flagship corporate social responsibility effort, 360 Degrees of Financial Literacy, we provide free tools and resources to help Americans improve their money management skills. One of the things that sets our program apart from others in the space is that all our materials are purely a public service on behalf of the nation’s CPAs. That means there is no product placement and no advertisements – just solid financial information, vetted by CPAs.
What can you do to get involved?
April is Financial Literacy Month. That means now (or when tax season ends) is the perfect time for all CPAs to look for opportunities to educate Americans. Below are three simple steps you can take to help your clients and their families better their financial lives.
Encourage your clients to talk to their children early and often about money. To help facilitate these conversations, the 360 website features the – short videos of CPAs explaining financial issues such as budgeting, saving and students loans. These short interactive videos are a good introduction to the topics and feature quizzes at the end to ensure that the information is being absorbed.
For clients who have children graduating this Spring and looking for their first job, the AICPA recently with advice from CPAs about how employee benefits are a serious consideration when evaluating a job offer. In fact, the Bureau of Labor Statistics found that more than 30 percent of total compensation is paid out in the form of benefits. Understanding and taking full advantage of employee benefits can help lay a solid foundation for a strong financial future.
Follow the AICPA’s for news articles featuring CPAs, financial tips and money motivation. Plus, you can share any of the content from the 360 website on your personal or professional social media accounts to help encourage your followers to think about their own finances. We’ve found that the more often that people are thinking about their financial decisions, the more likely they are to choose wisely.