One in five Americans is burying his or her head in the sand when it comes to managing personal finances, a report by Javelin Strategy & Research has shown.
Even though the recent financial crisis and ensuing recession has made it more important than ever to carefully track where our money is going, the number of Americans who say they don’t check their finances at all -- whether on a bank’s Web site or using personal finance software like Quicken -- has more than doubled, rising from 8 percent in 2009 to 19 percent in 2010, the report shows.
Javelin even found that those of us who do check our financial situations regularly using a bank’s Web site, a spreadsheet program like Excel or by logging on to a financial institution’s Web site are doing so less often.
The number of survey respondents who used a bank’s Web site is down from 59 percent in 2009 to 46 percent in 2010, while the even the number of Americans who said they use a simple pencil and paper to check their finances fell from 50 percent in 2009 to 46 percent in 2009.
“When your 401(k) is turning into a 201(k) we find that people just don’t want to open that [statement] envelope,” said Mark Schwanhausser, a senior analyst at Javelin and the author of the report. “We’re finding the same thing is happening when it comes to personal finances.”
The report’s findings have important policy implications for America’s financial institutions, said Schwanhausser. They need to make sure they are doing a better job of giving their online customers the ability to track their finances more effectively, he said.
“Right now, most banks don’t do that well, but there’s an opportunity here for them to make their online tools more practical, to show you how much you’re spending each day and what you’re spending your money on. It needs to be more of a Mint-like experience,” said Schwanhausser, referring to the popular online financial management Web site.
“The more information you have, the easier it is to make smart decisions about your money,” he added.
(Thanks to WalletPop for pointing out the report.)