|
Press
Press Releases
New Survey Finds Insufficient Savings for Emergencies Major Cause of Financial Worry Among Younger Women, April 27, 2005. Consumer Federation of America
Click here to download this article (PDF).
CFA and Visa Launch "Save $500 Challenge", Encourage More Women to Save
for a Rainy Day
Washington, D.C.-April 27, 2005-A new, nationwide survey released today by the Consumer
Federation of America (CFA) and Visa USA finds that a lack of personal savings to cover
periodic emergency expenditures was a principal cause for financial worry among women,
especially younger women. This has resulted in sleep and job productivity loss as well as
deteriorating health. In direct response, CFA and Visa have teamed up to launch a "Save $500
Challenge: Preparing Women for a Rainy Day," to encourage more women to open and
maintain a savings account.
Nearly three quarters (71 percent) of the women surveyed said they had worried about their
personal finances in the past year and two-thirds (66 percent) cited unexpected expenses as a
cause for those worries. Even more surprising, 88 percent of younger women, between the
ages of 18-24, said unexpected expenses was also a contributor to their financial worries.
One of the main causes for these concerns was the fact that they had little or no money set
aside for emergency situations. In fact, 42 percent of all women surveyed said they had
emergency savings of less than $500. And, 55 percent of women, between the ages of 25-34,
said that they did not maintain an emergency savings account of at least $500.
"The concern of younger women about their personal finances is far more widespread than we
had imagined, and far greater than that of older women," said Stephen Brobeck, Executive
Director, CFA. "The fact that more than one-half of younger women do not have available at
least $500 in emergency savings may help explain this concern," added Brobeck.
In response to these findings, CFA and Visa have launched a "Save $500 Challenge: Preparing
Women for a Rainy Day" to encourage women, especially younger ones, to build savings for
unplanned emergencies. The initiative is a call to action for women to maintain a minimum of
$500 but ideally $2,000 in emergency savings.
"There is clearly a need to better educate consumers, and women especially, about the
importance of having a savings account for emergency financial situations," said Rhonda Bentz,
vice president, Visa USA. "As part of Visa's commitment to helping consumers better manage
their finances, we strongly encourage women to sign up for this Savings Challenge," she added.
Women can enroll in the challenge by visiting http://www.save500challenge.org/. All
participants will receive a weekly email finance savings tip and will be eligible to enroll as an
American Saver, an America Saves service entitling consumers to free information and financial
planner advice. (www.AmericaSaves.org). They can also access Practical Money Skills for Life
(PMSFL), Visa's award-winning, online personal finance curriculum for consumers of all ages
and financial needs. It is available in English, Spanish and Chinese and can be accessed for
free at www.practicalmoneyskills.com.
The survey was administered by the Opinion Research Corporation to a representative sample
of 1,031 adult women in mid-November, 2004. The survey's margin of error is plus or minus
three percentage points.
About Consumer Federation of America
CFA is a non-profit association of some 300 pro-consumer groups, which seeks to advance the
consumer interest through research, education and advocacy.
About Practical Money Skills for Life
The Practical Money Skills for Life curriculum is teacher tested and teacher approved. At the
2001 National Education Association Expo, teachers graded and evaluated the program.
Nearly 100 percent of teachers who reviewed the website approved of it; 98 percent said they
would recommend the site to other educators; and 94 percent gave the program a "B" or better.
The curriculum currently reaches 2.5 million teachers, 37 million students, and 100,000
schools. Additionally, this program won the National Association of Consumer Agency
Administrators 2002 Achievement in Consumer Education Award (ACE) for the best innovative
program for the private sector and was named an "Honorable Mention" by the Jump$tart
Coalition for Personal Financial Literacy's 2002 Soaring$tar Award.
About Visa
Visa USA is the nation's leading payment brand and largest payment system, enabling banks to
provide their consumers and business customers with a wide variety of payment alternatives
tailored to meet their evolving needs. Jointly owned by nearly 14,000 financial institutions, Visa
USA is committed to increasing the choice, convenience, acceptance, and security of Visa
payments for all stakeholders in the payments systems - Members, cardholders and merchants.
Through its Members, more than 458 million Visa-branded cards have been issued to
cardholders, which are accepted at over 5.7 million locations within the United States. Each
year, U.S.-based financial institutions rely on Visa's processing system, VisaNet, to facilitate
$1.3 trillion in transactions with virtually 100 percent reliability.
Worldwide, cardholders in over 150 countries carry more than 1 billion Visa-branded cards,
accepted at nearly 22 million locations, accounting for $3 trillion in annual transaction volume.
Visa offers a trusted, reliable and convenient way to access and mobilize financial resources -
anytime, anywhere, anyway.
Key Findings of the CFA/Visa Survey:
Most Women -- Especially Younger Women -- Have Recently Worried About Their
Personal Finances
When asked if in the past year they ever worried about their personal finances, nearly
three-quarters (71%) say they had, and nearly three in ten (29%) say they have worried
frequently.
What is particularly surprising, though, is that young women are far more likely to worry
about their finances than are older women. Among those 25-34 years of ago, 84%
worried at least sometimes, with 38% worrying frequently. Yet, among those 65 years
and older, only 52% worried sometimes, with a mere 17% worrying frequently.
Not surprisingly, the lower their incomes, the more women worried about their finances.
Among those with income below $25,000, 85% worried at least sometimes, with more
than one-half (56%) worrying frequently. Yet, among those with income over $75,000,
only 59% worried sometimes, with 16% worrying frequently.
Personal Finance Worries Cost Sleep, Harmed Health, and Reduced Work
Productivity, Especially for Younger Women
Nearly one-half (49%) of those worrying about their personal finances -- more than onethird
of all women -- say they lost sleep because of this worrying. And, young worriers
were far more likely than old worriers to lose this sleep. Among those under the age of
45, well over one-half report they lost sleep. Among those over 65, only 37% say they
lost sleep. So, younger women are most likely to worry about their personal finances and,
if they did, are also most likely to lose sleep because of these worries.
Nearly one-third (31%) of the 71% worrying about their personal finances say these
worries worsened their health in the past year. That means that, among all women, nearly
one-fifth say that financial concerns worsened their health.
Nearly one-fifth (19%) of worriers say that the worries made them less productive at
work in the last year. Considering that working women are more likely to worry about
their finances than non-working women, nearly 10 million women say that financial
concerns hurt their work productivity last year.
Unexpected Expenses an Important Cause of Financial Worries, Especially for
Younger Women
Two-thirds (66%) of those worrying about their finances say that unexpected expenses
have caused at least some of their financial concerns. Moreover, younger women are far
more likely than older women to attribute financial worries to these unanticipated
expenses.Of those worriers 18-24 years of age, 88% say that these expenses have caused at least
some of their worries. Of those worriers over 65, only about one-half (52%) attribute
worries to unexpected expenses.
Using open-end questions, the survey also revealed two principal sources of unexpected
expenses -- medical and car-related. A large majority of these expenses, about which
women worried, are related to health care (36%) or to motor vehicle transportation
(32%). No more than 4% of women worry about any other type of unexpected expense.
These unexpected expenses are not small. The typical (median) amount of an unexpected
expense incurred last year by worrying women was $400. And, the typical amount of all
unexpected expenses among these women was $2,000.
Lack of Emergency Savings Closely Linked to Financial Worries, Especially for
Younger Women
A surprisingly large proportion of women, especially younger women, say that they do
not have at least $500 in emergency saving. And, a large majority of these nonsavers say
that having this much savings would reduce their financial worries.
Forty-two percent of all women surveyed say they have emergency savings of less than
$500, with nearly two-thirds of this group not having a savings account. More than onehalf
(55%) of women 25-34 years of age, but less than one-quarter of those at least 65
(23%), say they did not maintain emergency savings of at least $500.
About two-thirds (66%) of those without this $500 say that, having at least this amount in
emergency savings would make them worry less about their personal finances. For those
between the ages of 25 and 45, the percentage who would value emergency savings was
even higher.
"Our data strongly suggest that the most important way to reduce financial worries is to
build up emergency savings of at least $500," said CFA's Brobeck. "Consumers should
not worry about low interest yields on these savings because the difference between a one
percent and a three percent annual return on $500 is only $10," he added.
Click here to download this article (PDF). |
