According to the inaugural “How America Buys and Borrows” survey by Wells Fargo & Company, Americans are getting their financial houses in order by paying closer attention to their credit scores and managing their debt.
The survey revealed that Americans are focused on managing their credit, with nearly 60 percent having checked their credit score or credit report within the past year. On average, more Americans are proud (40 percent) than concerned (22 percent) about their credit score.
Boomers and Gen Xers are more likely to say they actively reduce their debt (42 and 35 percent, respectively,) while 35 percent of Millennials say they choose to focus on increasing their savings.
The survey also revealed that consumers are engaging in healthy fiscal habits such as paying off their credit cards every month (39 percent,) saving for major purchases rather than relying on credit (38 percent) and sticking to a budget every month (32 percent.)
As consumers plan for 2014, Wells Fargo offers the following five tips:
1. Develop a realistic budget that includes your income, expenses, saving for life’s special moments and allowances for life’s unexpected moments.
2. Manage your cash flow and savings by tracking spending, reducing debt, saving for emergencies and avoiding overspending.
3. Build for the future by setting financial goals and living within your means. Create a financial plan to help you reach your goals and be prepared to adjust it if your life circumstances change.
4. Maintain strong credit and understand the real cost of borrowing. Know your credit score and check your credit report for accuracy annually. Before financing a big ticket purchase, understand the total cost of the loan over time.
5. Protect the money you have by avoiding becoming a victim of fraud or identity theft by safeguarding your personal information, reporting lost or stolen items such as checkbooks, debit cards or credit cards immediately and regularly reviewing your accounts to confirm all activity is legitimate.
Why is this important?
This focus on credit management is part of preparation for the future, as nearly 80 percent of respondents said they have purchases of $2,000 or more planned within the next two years. In the coming years, consumers anticipate financing purchases such as home improvements or a home purchase (41 percent), travel (32 percent) and automobiles (28 percent.)
For more information about responsible money management, visit www.wellsfargo.com/