Wednesday, December 8, 2010
The FINRA Investor Education Foundation (FINRA Foundation) today launched an interactive Web resource to display the results of America's first State-by-State Financial Capability Survey, which was also released today. The new website displays a clickable map of the United States that permits comparison of the financial capabilities of Americans in every state and across geographic regions. The State-by-State Financial Capability Survey, which surveyed more than 28,000 respondents, was developed in consultation with the U.S. Department of the Treasury and the President's Advisory Council on Financial Literacy.
The state-by-state survey found a significant disparity in financial capability across state lines and demographic groups:
- Citizens of New York, New Jersey and New Hampshire are the most financially capable. Those states ranked in the top five among all states in at least three of five measures of financial capability.
- Kentucky and Montana stood out as having lower financial capability when compared to other states. Citizens of both states were among the least financially capable in at least three of five measures of financial capability.
- Young Americans nationally were more likely to be less financially capable than older Americans, and they were significantly more likely to engage in non-bank borrowing.
The state-by-state survey echoed several of the findings of a smaller-scale national survey released in 2009, finding:
- Over half of all Americans are living paycheck-to-paycheck. 55 percent of Americans report spending more than or about equal to their household income.
- A significant majority of Americans (60 percent) do not have a "rainy day" fund to cover three months of unanticipated financial emergencies.
- More than one in five Americans (24 percent) have engaged in some form of higher cost non-bank borrowing during the last five years, including taking out a payday loan or getting an advance on a tax refund.
- Americans, on average, were able to correctly answer just three of five questions about fundamental financial concepts.
The study was developed in consultation with the U.S. Department of the Treasury and the President's Advisory Council on Financial Literacy. The data were collected through an online survey of 28,146 respondents (approximately 500 per state, plus D.C.), over a five-month period, June – October 2009. Within each state, data were weighted to match 2008 American Community Survey (ACS) distributions on age category by gender, ethnicity and education. All data in the surveys are self-reported by the respondents themselves