A study examining personal financial habits shows many Americans are struggling to cover their mortgage and other monthly bills, don’t have rainy day funds, and have yet to do the math on how much money they’ll need to retire.
Roughly 49% of those surveyed reported having trouble paying their monthly bills, according to Financial Capability in the United States, a report on a national survey by the Financial Industry Regulatory Authority (FINRA) Investor Education Foundation.
The survey was designed “to get a basic understanding of financial capabilities of adults in the U.S.,” said Richard G. Ketchum, chairman of the FINRA foundation. The survey yielded “a wealth of important and, in some cases, unsettling data,” Ketchum said at an event with Treasury Secretary Timothy Geithner in Washington to unveil the survey results.
“The stakes for financial education are extraordinarily high,” Geithner said.
Twenty-three percent of respondents who had a checking account reported overdrawing their account on occasion, and 16% of mortgage borrowers had been late on a mortgage payment within the past two years. Only 42% of nonretirees reported ever trying to figure out how much money they would need to save for retirement.
The national survey was conducted between May and July and drew 1,488 responses. The research also examined credit card use and credit scores, payday lending and saving for college expenses. The benchmarking survey looked at the impact of age, income and other demographic factors on decision making and financial literacy.
The national survey is a component of a three-part study called the National Financial Capability Study. The FINRA Investor Education Foundation will release the results of the state-by-state survey and military survey in early 2010.
The research was done in consultation with the U.S. Department of the Treasury and the President’s Advisory Council on Financial Literacy. The AICPA, which oversees the 360 Degrees of Financial Literacy national volunteer effort, provided input on the survey instruments.