Fifth Third Bank wants to push back on the notion that Americans are hopeless at managing their money and woefully uninformed about basic savings strategies.
A survey of U.S. adults commissioned by the bank found that most Americans have at least an elementary grasp of important financial information.
According to the poll, 87 percent know what APR stands for and 74 percent know what DTI — debt to income — means. Similarly, the poll found that 85 percent of respondents know what to do to improve their credit rating. Of course, whether or not they are willing or able to do that is another question.
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In addition, the survey found that nearly half of Americans (45 percent) know that they should set aside at least 20 percent of their monthly income for savings. Two-thirds recognize that they should use about 30 percent of the credit they are allowed by their credit card.
And while young people face increasing debt burdens from rising college tuition costs, most millennials are not in dire straits, according to the survey. Less than a third depend on their parents to make ends meet and nearly half have almost two months of living expenses saved up.
Twenty-five percent of Americans are entirely debt-free, the survey found.
"It's encouraging to see Americans are generally knowledgeable about basic finance concepts," said Jada Grandy, senior vice president and Community Reinvestment Act strategies director at Fifth Third. "There's still a long way to go in terms of transferring that knowledge from concept to practice, but with an understanding of best practices and a will to achieve independence, Americans are on the right track to financial empowerment."
It's worth noting that the results of the survey contrast starkly with other research that has suggested that a large percentage of Americans are financially illiterate and that nearly half of us couldn't come up with $400 to cover an emergency cost.
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