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FINANCIAL LITERACY

Survey Shows Few Tapping Stimulus Programs

 

April 14, 2010

The overwhelming majority of Americans haven’t taken advantage of the U.S. government’s programs to stimulate the national economy, according to a survey conducted for the AICPA by Harris Interactive.

 

Nine out of 10 respondents (91%) said they haven’t capitalized on the job stimulus plan covered under the American Recovery and Reinvestment Act, the housing stimulus tax credit of 2009 or Cash for Clunkers.

 

In an effort to understand how the economic crisis has affected behaviors and attitudes among the general public, the AICPA participated in the Harris Interactive March 2010 Harris Poll Quorum telephone omnibus study. Interviews took place between March 17 and March 21. The Harris Poll Quorum is a bimonthly survey of 1,009 U.S. adults ages 18 and older. The AICPA commissioned the survey in recognition of April as Financial Literacy Month.

 

Four percent of the survey respondents said they had taken advantage of the housing tax credit to buy their first home. The housing stimulus tax credit, which now includes homebuyers who’ve owned their previous residence for five years and are seeking a new principal home, expires April 30. To be eligible for the credit, taxpayers who have entered into a binding contract to purchase an eligible principal residence by May 1, 2010, must close before July 1, 2010.

 

Only 2% said they applied for jobs through the stimulus program, and another 2% received rebates when purchasing new cars through Cash for Clunkers, the 2009 legislation that encouraged citizens to replace their gas-guzzling cars with more fuel-efficient vehicles. The federal government reported creating 608,000 jobs in the fourth quarter of 2009. The government also reported that Cash for Clunkers resulted in 680,000 vehicle sales.

 

Sixty percent of Americans said they were delaying major decisions because of financial concerns. Buying an automobile topped a list of nine financial decisions Americans were putting on hold (27%). Buying a home ranked fourth, behind “some other major purchase or decision” and medical procedures.

 

“The government’s stimulus efforts and the hard financial challenges people have faced over the past year emphasize the essential role financial literacy plays in our lives,” Carl George, immediate past chairman of the AICPA’s National CPA Financial Literacy Commission, said in a press release. “Individuals can’t always control the events that affect their finances, but they can learn to control their finances. We want everyone to understand that financial literacy can and should be a major part of their lifestyle.”

 

The CPA profession’s financial literacy efforts encourage Americans to educate themselves and consider all financial decisions in the context of their individual circumstances, George said. “Americans potentially interested in a housing stimulus credit must consider basic questions: What does the program offer? How do the provisions relate to their own personal situations? Can they afford the mortgage payments even after the stimulus credit? What is the overall financial commitment?”

 

The National CPA Financial Literacy Commission oversees two programs to help Americans achieve financial well-being. The first, 360 Degrees of Financial Literacy (360financialliteracy.org), educates Americans on how financial issues affect them at 10 life stages, from childhood to retirement. A second campaign, Feed the Pig (feedthepig.org), created with the Ad Council, encourages Americans ages 25 to 34 to begin preparing for long-term financial security.

 

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