20% of Americans spend more than they earn WASHINGTON (12/13/10)--One in five (20%) Americans spend more than they earn. Most (60%) don’t have any rainy day funds. And about a quarter (24%) use non-bank loans. These were just some of the findings in a nationwide survey conducted by the Financial Industry Regulatory Authority (FINRA). The study underlines the need for financial literacy efforts many credit unions offer. FINRA launched an interactive Web resource to display the results of the study, which it calls America’s first state-by-state financial capability survey. The new website displays a clickable map of the U.S. and allows the public, policymakers and researchers to delve into and compare the financial capabilities of Americans in every state and geographic region. The state-by-state financial capability survey, which surveyed more than 28,000 respondents, was developed in with the U.S. Department of the Treasury and the President’s Advisory Council on Financial Literacy. The survey echoed several of the findings of a smaller-scale national survey released in 2009, finding:
* More than half of Americans are living paycheck-to-paycheck. 55% report spending more than, or about equal to, their household income. * A significant majority of Americans (60%) do not have a “rainy day” fund to cover three months of unanticipated financial emergencies. * More than one in five Americans (24%) have engaged in some form of higher cost non-bank borrowing during the past 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 data were collected through an online survey of 28,146 respondents (about 500 per state, plus Washington D.C.), over a five-month period, June through October 2009. Within each state, data were weighted to match 2008 American Community Survey distributions on age category by gender, ethnicity and education.