However, the poll conducted by the National Foundation for Credit Counseling (NFCC) found those who were aware of the increase allocated the money responsibly, with the largest number of respondents indicating they used it to pay off debt (18%), while the second highest number (8%) caught up on past-due bills.
Smaller percentages either increased their retirement contributions (4%) or saved the money (3%). Only 1% indicated that they spent the money on something for themselves.
The 2% Social Security payroll tax cut put $1,000 back into the pockets of a family earning $50,000 annually. The cut has been approved for two months in 2012 (see Payroll Tax Cut Bill Includes Recapture Tax).
“Even if the dollar increase is small, consumers should be aware of it,” said Gail Cunningham, spokesperson for the NFCC. “Not recognizing that the paycheck was larger begs the question of how the additional money was spent. Knowing how much you make and consciously determining how to spend it are basic building blocks of financial stability. This poll provides another example of the need for increased financial education.”
The NFCC’s January Financial Literacy Opinion Index was conducted via the homepage of the NFCC website from January 1-31, 2012 and was answered by 1,797 individuals.