Consumer News & Views
Published twice monthly
May 1, 2016

In this Issue…

  • Consumer Confidence Slips in April.
  • Why Should Consumers Care About Their Personal Finances?
  • What Keeps Consumers Awake at Night?
  • ACC Annual Meeting Scheduled for June 10, 2016 in La Jolla, CA
  • ACC’s Friend of the Consumer Award Recognizes Consumer-Friendly Companies.
  • Apply for the 2016 Green CSM Certification Program.

Consumer Confidence Slips in April. The Conference Board Consumer Confidence Index®, which had increased in March, declined moderately in April. The Index now stands at 94.2 (1985=100), down from 96.1 in March.

“Consumer confidence continued on its sideways path, posting a slight decline in April, following a modest gain in March,” said Lynn Franco, Director of Economic Indicators at The Conference Board.

Franco added, “At the same time, consumers’ assessment of current conditions improved, suggesting no slowing in economic growth. However, their expectations regarding the short-term have moderated, suggesting they do not foresee any pickup in momentum.”

The American Consumer Council, a national non-profit consumer education organization that monitors consumer sentiment, noted that consumers continue to remain positive about business conditions and the job market.

Thomas Hinton, president of the American Consumer Council said, “Despite some bumps in the road, our indicators tell us that consumers are confident and hopeful, but not necessarily overly excited about their economic prospects for the remainder of 2016. We expect to see modest adjustments in terms of consumer confidence and the labor market.”

Why Should Consumers Care About Their Personal Finances? By Cameron Huddleston

Sometimes when people ask what I do for a living and I tell them that I’m a personal finance journalist, they react with a blank stare followed by, “I know nothing about personal finance.” To be honest, it doesn’t surprise me when I hear that. Nearly half the country is financially illiterate, according to Standard & Poor’s Rating Services 2015 Global Financial Literacy Survey.

Knowledge about personal finance certainly isn’t innate, and most schools don’t teach the subject. Just 17 states require high school students to take a course in personal finance, according to the Council for Economic Education’s 2016 Survey of States.

Personal finance isn’t always taught at home, either. The T. Rowe Price 2016 Parents, Kids & Money Survey found that 71 percent of parents are reluctant to talk to kids about financial matters, and less than half of the parents surveyed take advantage of opportunities throughout the day to teach their kids about money.

Money touches almost every aspect of modern life, so why do Americans struggle so much with understanding how to manage their finances? Despite efforts and initiatives such as National Financial Literacy Month every April, which raises awareness of financial education resources, Americans’ money savvy is still lagging ― and the problem has lasting consequences for everyone.

Why Most People Don’t Actively Manage Their Money.
Some Americans might really be too busy to take the time to learn what isn’t being taught at school or at home. But others seem to just not care.

Michael Hardy, a certified financial planner with Mollot & Hardy in Amherst, N.Y., said he often encounters people who don’t seem to care about their personal finances. “They could be clients, prospects, family or friends,” he said. “In my experience, it seems the average person does not want to have to pay too much attention to their personal finances as they believe they will deal with it later, or it will all work itself out, or they will leave it to their spouse or the government to deal with.”

The truth is, though, no one can or should care more about your personal finances than you. And if you don’t take control of managing your money, your finances can control you. So you should care, and you should take the time to make your finances a priority.

How Caring About Your Finances Actually Saves You Money.
When you take the time to understand the basics of personal finance and learn to manage your money wisely, you can actually improve your financial situation. “If you have money, you have a choice,” said Kimberly Foss, author of “Wealthy by Design” and founder and president of Empyrion Wealth Management.

Foss came from a humble background. She was the youngest of six children, her father was a carpenter and her mother sold Avon products. “There was no money,” she said. And if the washing machine broke down, for example, they would wash clothes by hand and hang them out to dry because they had no other choice.

Her mother taught her an important lesson at a young age about money, however. When Foss wanted a pair of Jordache jeans that cost $38 ― this was in the 1960s, so that $38 would be more than $250 now ― her mother made her work for the jeans, paying her $1 an hour. Her mother also made her save an amount equal to the cost of the jeans. Foss said that being forced to save set a standard that she adhered to throughout her life.

Making the choice to save and to take control of your finances allows you to make other choices based on what you want rather than having those choices made for you because your financial situation limits what you can do. Caring about your personal finances gives you the freedom to do the things you want to do in life, Hardy said. When you understand how to manage your money and how to save money, you can:

  • Reduce financial stress
  • Eliminate debt
  • Avoid living paycheck to paycheck
  • Retire on your own terms

Making sure your finances are on track also allows you to support your family and help others who are in need, Foss and Hardy said. That’s a much better position to be in than having to seek financial support.

What Happens If You Don’t Care?
Not knowing how to manage your money wisely or and not knowing where you stand financially can have several repercussions. “The far biggest repercussion for not caring is anxiety, stress and possible problems in your relationships,” Hardy said. “The No. 1 cause of divorce happens to be money-related issues.”

Stress results from not being able to pay bills because you haven’t learned to budget wisely or not having cash to cover an unexpected expense because you don’t have an emergency fund. It can come from not being able to get a loan you need because your credit is bad or having to declare bankruptcy because you accumulated too much debt.

I know it can be hard to find time in a busy schedule to even figure out how much cash you have coming in and going out each month, let alone come up with a comprehensive financial plan. But if you don’t think long term and make financial decisions with the future in mind, you will experience consequences. “Wake up and smell the coffee because, one day, you won’t have coffee,” Foss said.

How to Take Control of Your Finances:
Taking control of your finances might seem overwhelming if you don’t know where to start. It’s OK to take baby steps, though, said Brad Sherman, investment advisor with Sherman Wealth Management in Gaithersburg, Maryland. Even taking one step is better than none, he said.
The hardest step might be being honest with yourself about where you are financially, Hardy said. But that is the most important thing you can do to improve your financial well-being. To do that, you’ll need to examine your finances closely. The following simple steps can help you understand how to budget and improve your financial situation.

  1. Figure Out Where Your Money Is Going.
    To get a sense of where you stand financially, you need to track your income and expenses for a couple of months. “People need to be aware of where there money is going,” Foss said. Otherwise, you’ll end up spending all the money you make.
    You can use a pencil and paper, a spreadsheet or personal finance software, or a budgeting app such as Mint, which can help track your spending. Choose the method that works best for you. Once you have an idea of how much money is coming in and going out each month, then you can take the next step to get your finances under control so that you’re living within your means and increasing your savings.
  2. Write Down Your Goals.
    Figure out what you want to achieve financially in the short term, medium term and long term, Sherman said. Perhaps in the short term, you want to save enough money to take a trip. Perhaps your medium-term goal is to save enough for a down payment on a house. And maybe your long-term goal is to be able to retire at age 65 and travel the world.

    “The goals can be whatever you want,” Sherman said. But the key is to write them down and to discuss them with your significant other so you’re on the same page, Sherman said. Having goals gives your money a purpose and helps you prioritize spending ― and putting them in writing can prompt you to make a plan to achieve them, he added.
  3. Create a Roadmap to Achieve Your Goals.
    Once you know where your money is going and where you want it to go, you can take steps to align your spending with your priorities. In other words, you can create a plan to take full control of your money.

    One way to plan is to use the 50/20/30 rule. Foss explained the components of this approach:
    • 50 percent of your income goes to essentials ― housing, transportation, food, utilities and medical.
    • 20 percent goes to debt reduction, savings and charitable contributions. If you have high-interest debt such as credit card debt, at least half of that 20 percent should go toward debt reduction, Foss said. If you don’t have debt, you can divide your savings into several accounts as designated “buckets” to help you reach your short-, medium- and long-term goals, Sherman added. Just make sure one of those accounts is an emergency fund with a goal of saving enough to cover six months’ of expenses.
    • The remaining 30 percent can be used for flexible spending ― things you want but can live without, such as cable TV. If you want to boost savings or reduce your debt faster, this is spending that you can trim.

    Sherman said that people often believe they can’t achieve their financial goals because haven’t taken time to create plan. Once they create a plan and break it down into small steps, though, they can be surprised by what they achieve.

    “I have clients hit goals they never thought they would,” he said. “It’s motivating. Everyone likes crossing things off the list.”

  4. Get Help from a Financial Advisor.
    You have to be the one to care about your finances. But that doesn’t mean you have manage them entirely on your own. Start reading more about budgeting or follow personal finance blogs to make managing your money less of a chore and more of a routine. These resources can help you know whether you need to consult a professional financial advisor, what questions you should ask, and give you personal finance tips on the following:
    • How to pay off debt
    • How to save money on groceries and other necessities
    • How to save money for a house
    • How to save money for a car
    • How to stick to a budget for the long term

    Check to see if your employer offers any financial or investment advising services as part of your benefits. Or find a fee-only financial planner through the National Association of Personal Financial Advisors. If you just need to meet with a planner a few times to get on the right track, some planners charge by the hour, such as those in the Garrett Planning Network, a nationwide group of independent, fee-only financial planners.

    Investing in your financial well-being can benefit your life in numerous ways. “Get a plan together,” Foss said. “That’s the best money you’ll ever spend.”

Cameron Huddleston writes the Life + Money column for GOBankingRates -- focusing on a broad array of personal finance topics, including retirement, family finances and spending less. She is based in Nashville.

What Keeps Consumers Awake at Night? By Elyssa Kirkham.

Keeping a roof over their heads, the lights and gas on, food in the fridge, a car in the driveway — covering everyday expenses is Americans’ biggest financial concern, according to the Financial Burdens Survey from GOBankingRates. One in four Americans says that the high cost of living is the most challenging personal finance issue. The survey also reveals how Americans rank other common budget concerns from most to least difficult to handle.

GOBankingRates conducted its Financial Burdens Survey through Survata, asking respondents to rank personal financial concerns according to how challenging they find them to be. The survey included the following financial concerns as options displayed randomly, which respondents ranked from least to most challenging:

  • High cost of living
  • Healthcare costs
  • Insufficient income
  • Taxes (income, property, and/or other taxes)
  • Retirement savings
  • Higher education costs

The survey also included questions that captured respondents’ demographic information, including age, gender, political leanings, income and debt levels, and household size.

High Cost of Living Is Top Personal Finance Challenge for Americans.
When respondents’ rankings of the different answer options are averaged, “high cost of living” is ranked as the most challenging financial concern:

  • Cost of living had an average rank of 2.77 on a scale of one to six, with one being the primary concern and 6 being the least concerning.
  • Americans also said high costs of living are their top financial issue more often than other financial burdens, with a quarter (24 percent) putting this as their No. 1 financial challenge.

Americans view the high cost of living as their top personal budget concern, despite reports that consumer prices — such as oil and gas prices — have dropped in recent years. The Social Security Administration tracks consumer prices and will often increase benefits to match an increase in the cost of living, but for 2016, the SSA announced there would be no cost-of-living adjustment to benefits.

This measure of consumer prices doesn’t reflect fast-rising housing costs and home prices, however. “Many Americans are likely feeling pinched by high housing costs,” said Cameron Huddleston, Life + Money columnist for GOBankingRates. “Since the housing market crash, home prices have increased significantly — especially in large cities, where prices have seen dramatic spikes. Considering that housing is typically the biggest expense for most households, it makes sense that many consider their cost of living to be high even though other consumer prices are actually low now.”

Insufficient Income and Healthcare Are Major Concerns.
After cost of living — with 24 percent of respondents ranking it the No. 1 financial challenge — Americans are most concerned with how significantly healthcare costs and insufficient income affect them personally:

  • Healthcare costs are ranked as more challenging overall on average than insufficient income, with average rankings of 3.15 and 3.43 out of 6, respectively.
  • Insufficient income, however, was chosen more often than healthcare costs as the No. 1 concern, this spot 21 percent of the time.
  • Healthcare costs were selected as the top financial challenge by 18 percent of respondents.

Healthcare costs have been fluctuating in recent years as the Affordable Care Act continues to affect this market in new ways, and a 2016 GOBankingRates healthcare costs survey showed that 40 percent of Americans expect to pay more for healthcare in 2016 than they did in 2015. “Considering that healthcare costs have been rising steadily, Americans should be concerned about the impact this expense has on their finances,” Huddleston said.

Facing these higher healthcare costs and other increased costs of living is challenging for Americans still earning stagnant wages that have barely inched upward in recent years.

“It’s not surprising that a top financial concern of many Americans is insufficient income,” Huddleston said. “Although the economy has recovered from the recession, household incomes have not. In fact, the median household income is still lower than it was in 2007 before the start of the recession.”

Taxes, Retirement Savings and Higher Education Are Considered Less Challenging
Fewer Americans are concerned about taxes, retirement savings and higher education costs than they are about other personal finance factors:

  • Taxes are ranked as the most challenging of these three issues, with an average ranking of 3.63 out of 6. Retirement savings are ranked just behind taxes at 3.83, and higher education costs come in last at 4.18.
  • Taxes and retirement savings were each ranked as the No. 1 concern by 13 percent of respondents, and higher education was picked as the No. 1 challenge by 12 percent of respondents.

These three financial issues might be less concerning because they have a limited impact on people compared with high costs of living and healthcare expenses, which affect virtually everyone year-round. Taxes, on the other hand, are considered by many people less frequently, sometimes only once a year to file a tax return. Higher education and retirement costs are tied to specific life stages and can be offset by options like scholarships and Social Security income, so they’re not as much of an everyday concern as the cost of living, for example.

How People’s Life Stages Change Their Views on Money Challenges.
Several of the common financial concerns offered as answer options in this survey are tied closely to stages of life, and the results show that the highest-ranked money struggle for each age group reflected that group’s short-term or immediate financial need more than a longer-term view of financial challenges. For example, only 6.6 percent of 25- to 34-year-olds ranked retirement savings as their biggest budgetary concern, whereas 20.2 percent of retirement-age boomers ranked it No. 1. Similarly, less than 1 percent of seniors 65 and over are thinking about higher education when ranking their top money challenges.

With their attention — and budgets — consumed by making ends meet, many Americans aren’t even saving enough for an emergency fund let alone retirement. The results of this survey not only reflect an overall trend that Americans are struggling so much with cost of living that they are unable to save for long-term needs but also that they aren’t even ranking those long-term financial needs as a priority concern.

Younger Millennials Are Focused on Paying for College.
For millennials ages 18 to 24, college costs are their primary financial concern:

  • This age group is the most likely to view higher education costs as a major challenge.
  • Over a third (34.2 percent) ranked college costs as their No. 1 financial concern.

The cost of higher education has been rising, so more and more young adults are struggling to find a way to pay for a college degree,” Huddleston said. Moreover, fewer parents plan to help their young adult children pay for college, found a 2015 Discover Student Loans Annual Survey, and this trend puts a greater burden on students to cover these expenses.

Older Millennials Say Incomes Are Insufficient.
For professional-aged millennials (ages 25 to 34), the biggest personal finance challenge is figuring out how to scrape by on an income that simply isn’t high enough:

  • Older millennials make-up the age group that is most challenged by insufficient income.
  • 26.4 percent of older millennials ranked insufficient income as their No. 1 financial burden.

Many millennials are still struggling with under-employment, low wages and other lingering effects of the Great Recession. Today’s 18- to 34-year-olds earn thousands less than the same age group made in past decades, according to a 2016 report from social policy advocacy group Generation Progress, and 70 percent of minimum-wage workers are millennials. The responses in this survey show that the gap between income and cost of living presents a significant challenge to millennials.

Gen X Struggles with High Taxes.
Gen Xers (ages 35 to 54) say taxes and high cost of living are their biggest financial burdens. More than any other age group, Gen Xers are concerned about taxes, with 16 percent ranking this as their top financial challenge.

Gen Xers tend to have higher incomes than millennials, but these higher wages also put a higher tax burden on this group. In fact, taxpayers ages 35 to 54 paid over a third (35.7 percent) of total taxes collected by the IRS in 2012, according to the Tax Foundation, with older Gen Xers (ages 45 to 54) paying the biggest share of taxes at 18.2 percent.

In addition to feeling the strain of higher tax burdens, Gen X respondents also said that budgeting for high costs of living is a major challenge for them:

  • Keeping up with the high cost of living is the most common challenge for younger Gen Xers (ages 35 to 44), selected as the No. 1 financial concern by 26.3 percent.
  • High cost of living was ranked No. 1 by 26.3 percent of older Gen Xers (ages 45 to 54), and insufficient income and healthcare costs were each ranked No. 1 by 22. 6 percent of this age group.

The high cost of living is likely felt most acutely by Gen Xers because this group has so many financial demands. Dubbed a sandwich generation, this group faces financial issues and costs that arise from raising children as well as caring for aging parents. Their higher incomes might not be enough to keep up with the higher costs of this stage of life, which often includes a range of healthcare costs, from child delivery to assisted living care.

Baby Boomers, Seniors Concerned With Retirement and Healthcare.
Top financial concerns of baby boomers (ages 55 to 64) and seniors (ages 65 and over) are consistent with their life stage as well:

  • Baby boomers and seniors are the most likely to say their top personal finance concerns are healthcare costs (at 23.9 percent each) and retirement savings (about 20 percent each).
  • They are at least twice as concerned about managing their retirement savings as Gen Xers and millennials.

“It’s no secret that the savings rate is low in America,” Huddleston said. “A GOBankingRates retirement survey recently found that one in three Americans has save $0 for retirement.” The same survey revealed that about three-quarters of savers 50 and over are behind on retirement savings. “People certainly should be concerned if they’re not setting aside enough for retirement and should make it a priority.”

An added financial burden for older age groups is healthcare costs, as aging adults face more expensive health insurance premiums and need more frequent and costly medical care. “Older adults are really feeling an increased burden on their budget due to these costs,” Huddleston said. Accommodating these costs is difficult for them:

  • Baby boomers (ages 55 to 64) rank high cost of living as their No. 1 challenge 26.4 percent of the time, more than any other group.
  • Seniors (ages 65 and over), however, are the age group least challenged by high cost of living, with just 19 percent selecting this as their top answer; however, they rank insufficient income and healthcare costs as their top two personal finance concerns.

Women More Challenged by Healthcare Costs, Men by Retirement Savings.
When it comes to gender, men and women are both challenged most by high costs of living and insufficient incomes, and they are equally likely to name these as their top financial concerns. There are some areas of difference, however:

  • Women are 25 percent more likely than men to name healthcare costs as their No. 1 financial burden, and they are 30 percent more likely than men to find higher education costs challenging.
  • Men are 30 percent more likely than women to name retirement savings as their top financial challenge and 36 percent more likely to find taxes burdensome.

“Studies have found that women have higher healthcare costs throughout their lives than men,” Huddleston said. “It’s not surprising that women were more likely than men to consider healthcare costs to be a bigger financial challenge.”

Another factor holding women back financially is the gender pay gap; women earn just $0.79 for every $1 earned by men. This pay gap can persist even among high-earners, with a recent analysis of MBA graduates from Bloomberg showing that women with MBAs earn $35,000 less than their male peers within eight years of graduation.

Despite earning much less than their male peers, these female graduates face the same education costs and student loans. The pay difference puts a disproportionate burden on women, who must cover or repay the same high costs of college with smaller post-college incomes.
For men, higher earnings can bring other frustrations, such as having to pay higher taxes on that higher pay. But even though they list retirement savings as a top financial burden, their prioritization of this budget factor is putting them ahead of women in retirement savings. GOBankingRates’ 2016 retirement survey revealed that more men are on track to save enough for retirement than women.

How Republicans and Democrats View Financial Challenges Differently.
The survey asked respondents which party they planned to support in the 2016 presidential election. Among the two major political parties, personal finance concerns differed greatly.

Democrats Say Insufficient Income, Higher Education Costs Are Most Challenging.
Democrat respondents revealed the following about their personal finance concerns:

  • Democrats are twice as likely as Republicans to say higher education costs are their No. 1 personal financial burden.
  • Democrats also ranked insufficient income as their No. 1 financial burden nearly 50 percent more often than Republicans did.

People earning lower family incomes of $30,000 or less are about twice as likely to identify as Democrats as Republicans, according to Pew Research, and messages addressing income inequality tend to resonate with these voters. Both major Democratic candidates, Hillary Clinton and Bernie Sanders, have proposed plans to make college affordable or even free in the U.S. Similarly, Sanders’ income inequality platform and Clinton’s attention to the gender pay gap have garnered them loyal followings.

Healthcare Costs, Taxes Are Republicans’ Top Personal Finance Concerns.
Republican respondents view the following as their biggest financial burdens:

  • Republicans are 70 percent more likely than Democrats to be concerned with healthcare costs.
  • Republicans are twice as likely as Democrats to say taxes are their No. 1 financial challenge.

Republicans’ concerns over healthcare costs might be related to the party’s overall dislike of the Affordable Care Act, which had an approval rating of just 14 percent among Republicans in a 2015 Gallup Poll compared to 83 percent approval from Democrats.

When it comes to taxes, Republicans are also less likely to have a favorable view of the current tax system. According to a 2015 Pew Research Center poll, Republicans were significantly more likely than Democrats to view the tax system as too complex and to feel bothered by the amount of taxes they had to pay.

High Earners Worry About Taxes, Low Earners Want to Increase Income.
The GOBankingRates survey also asked respondents about their household income, debt and household size. Household debt and size did not show a strong correlation to specific personal finance challenges; however, income level did correlate somewhat to financial burdens.

Those with lower incomes tend to say that their low incomes are the source of the biggest money struggles. “Insufficient income is certainly a challenge if you’re struggling to pay bills and stay afloat financially,” Huddleston said.

Those earning higher incomes, on the other hand, are more likely to say taxes are their most challenging personal finance issue. “If you’re in the highest tax bracket and hit by a tax rate of 39.6 percent, it makes sense that you consider taxes to be a big financial challenge,” Huddleston said.

Whatever Americans’ income levels, there are many factors they face that can complicate finances. Some of these factors, such as taxes, are outside of the immediate control of Americans. The Financial Burdens Survey shows, however, that many Americans are still struggling with basic financial challenges like earning enough and living within their means.

These findings underscore the need for many people to focus on the basics of personal finance that they can control: setting and sticking to a budget while working to grow their income and increase their value to employers. Even when facing financial difficulties, Americans can take their money further by practicing sound money management and making smart financial moves to maximize opportunities and minimize risk.

Elyssa Kirkham. As a finance journalist and editor with GOBankingRates, Elyssa Kirkham covers finance news, consumer savings and deals, and banking. Kirkham's work has appeared on major sites like Huffington Post, MSN, Investopedia, CU and CB Insight, The Motley Fool and a range of major local newspapers. Before GoBankingRates, Kirkham worked as a writer and editor for print magazines and digital marketing agencies. In her free time she also writes fiction.

ACC Annual Meeting Scheduled for June 10, 2016. The American Consumer Council will hold its annual membership and business meeting on Friday, June 10, 2016 at 10:00 am at The Lodge at Torrey Pines located in La Jolla, CA. The meeting is open to all members of ACC and there is no charge to attend the meeting. The business agenda for the meeting will be published in May 2016. For more information, please contact ACC’s meeting department at 1-800-544-0414.

The Lodge at Torrey Pines, La Jolla, CA

ACC’s Friend of the Consumer Award Recognizes Outstanding Businesses in 2015-2016.

Is your business consumer-friendly? Does your business deserve greater recognition for its service to consumers? If so, you should apply for the American Consumer Council’s Friend of the Consumer Award. Now is the time to apply!

Throughout the year, ACC presents its "Friend of the Consumer" Awards. This prestigious award recognizes manufacturers, retailers, and other businesses that produce or sell products in the United States that meet or exceed federally-mandated standards and are touted by consumers as “consumer friendly.”

Each year, ACC awards numerous "Friend of the Consumer" Awards to deserving companies and organizations because they have "demonstrated a commitment to American consumers by providing a specific product or service that fosters consumer confidence and market acceptance."

To apply for the "Friend of the Consumer" Award, complete the online application and return it to ACC with the application fee. Applicants will be notified within 5 days of receipt of their application. Thereafter, a panel of independent judges will review your application and make a formal recommendation within 20 days of receipt of your award application.

For more information, visit:

Green CSM Certification Accepting Applications for 2016 Summer Cycle:

If your company or organization would like to increase its credibility with consumers, you should consider applying for the Green CSM Certification. Applications for the 2016 Summer cycle are now being accepted through September 30, 2016.

It's a proven fact that consumers want to do business with companies that are eco-friendly and practice Corporate Social Responsibility (CSR). The process is straight-forward and all applicants are recognized by ACC and the Green USA Institute.

All applicants complete the criteria and submit their responses to ACC's Green Consumer Council for review, assessment and feedback. Program details and the Green CSM Certification criteria can be viewed at ACC's website located at: