Tuesday, December 15, 2009
The FINRA Investor Education Foundation announced the release of the National Financial Capability Study today at a special event at the U.S. Department of the Treasury. The National Financial Capability Study established a baseline measure of the ability of Americans to manage their money, benchmarking four key indicators of financial capability and evaluating how these indicators vary with underlying demographic, behavioral, attitudinal and financial literacy characteristics. It consists of findings from three linked surveys:
National Survey. A national, random-digit-dialed telephone survey of 1,488 respondents with over-sampling to enable segmentation by selected demographic variables (e.g., race, household income, education level) (released December 2009)
State-by-State Survey. A state-by-state online survey of approximately 25,000 respondents (roughly 500 per state, plus DC) (to be released in 2010)
Military Survey. An online survey of 800 military personnel and spouses (to be released in 2010).
According to the executive summary:
1. Making Ends Meet. Nearly half of survey respondents reported facing difficulties
in covering monthly expenses and paying bills.
2. Planning Ahead. The majority of Americans do not have “rainy day” funds set
aside for unanticipated financial emergencies and similarly do not plan for
predictable life events, such as their children’s college education or their own
3. Managing Financial Products. More than one in five Americans reported engaging
in non-bank, alternative borrowing methods (such as payday loans, advances on
tax refunds or pawn shops). And few appear to be knowledgeable about the
financial products they own.
4. Financial Knowledge and Decision-Making. While many American adults believed
they were adept at dealing with day-to-day financial matters, they nevertheless
engaged in financial behaviors that generated expenses and fees and exhibited a
marked inability to do basic interest calculations and other math-oriented tasks.
In addition, few compared the terms of financial products or shopped around
before making financial decisions.