FINRA NFCS 2012 Overview-06-13-NJCFE-With NJ Data
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FINRA NFCS 2012 Overview-06-13-NJCFE-With NJ Data

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Overview of 2012 NFCS findings and New Jersey data.

Overview of 2012 NFCS findings and New Jersey data.

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FINRA NFCS 2012 Overview-06-13-NJCFE-With NJ Data FINRA NFCS 2012 Overview-06-13-NJCFE-With NJ Data Presentation Transcript

  • 1Applied Research & Consulting LLC•320 West 13th StreetSeventh FloorNYC, NY 10014•Tel. 212.226.1007Fax. 212.226.0240E-mail. arc@arcllc.comJune 21, 2013FINRAInvestor Education Foundation2012 National FinancialCapability StudyPresented to the NJ Coalition for Financial Education(NJCFE)Dr. Barbara O’Neill, Rutgers Cooperative Extension
  • 2National Financial Capability Study• Goal—Benchmark and better understand financial capabilityin America• Designed by multi-disciplinary team of researchers, policy-makers and subject experts• Baseline study conducted in 2009– National Survey: Nationally projectable telephone survey of 1,488American adults– State-by-State Survey: Online survey of approximately 28,146respondents (roughly 500 per state + DC)– Military Survey: Online survey of 800 military personnel andspouses
  • 32012 NFCS Goals• Conduct second wave of State-by-State and MilitarySurveys• Update survey content while preserving key trackingmeasures• Improve utility of Military Survey– Boost representation of younger service members– Supplement sample with military personnel from State-by-State Survey– Collaborate with DoD to match respondent classification questions
  • 42009 NFCS Impact• Twenty one publications– Peer-reviewed journals– White papers– Issue briefs• Dozens of citations– Media: Wall Street Journal, US News and World Report, Today Show– Government reports: GAO, President’s Advisory Council on FinancialCapability– Congressional testimony: Professor Lusardi, FINRA Foundation• Top-tier researchers– Urban Institute, Federal Reserve, Social Security Administration– Dartmouth, Wharton, Wisconsin-Madison, and more
  • 2012 NFCSPRELIMINARY FINDINGS
  • 6Spending vs. Saving41%36%19%Spending less thanincomeSpending about equal toincomeSpending more thanincomeOver the past year, would you say your spending was less than,more than, or about equal to your income?42%(2009)35%(2009)20%(2009)
  • 7Spending vs. SavingTop 5 states Bottom 5 states1 District of Columbia 47.0% 51 Idaho 34.3%2 New Jersey 46.5% 50 Wyoming 34.5%3 California 45.7% 49 Oklahoma 35.9%4 Massachusetts 45.5% 48 Rhode Island 36.0%5 Florida 44.0% 47 West Virginia 36.1%US Average 40.9% US Average 40.9%Spending less than income by state
  • 840%36%42%43%16%18%20122009VerydifficultSomewhatdifficultNot at alldifficultMaking Ends MeetIn a typical month, how difficult is it for you to cover yourexpenses and pay all your bills?Some-whatdifficult42%Not at alldifficult40%Verydifficult16%Dontknow/Noanswer2%
  • 943%33% 33%48%32%20%10%18%19%15%Making Ends MeetDifficulty covering expenses and paying bills by ethnicityVerydifficultNot at alldifficultWhite Black Hispanic Asian Other
  • 1040%35%20122009% YesEmergency FundsHave you set aside emergency or rainy day funds that wouldcover your expenses for 3 months, in case of sickness, job loss,economic downturn, or other emergencies?No56%Yes40%Dontknow/Noanswer4%
  • 11Sources of Income63%24%19%19%19%14%13%Over the past 12 months, did you receive any of the following types of income?Salaries, wages, freelance pay or tipsSocial Security retirement benefitsOther federal or state benefits (e.g.,unemployment, disability, SSI, TANF)Payments from a pension planMoney from family members who do notlive in your householdIncome from a businessWithdrawals from retirement accounts(e.g., 401(k), IRA, Keogh)
  • 12Sources of Income50%18%65%19%77%18%Salaries, wages, freelance pay or tips Money from family members who do not livein your householdHS or less Some college College or moreSources of income by education level
  • 1346%35%33%30%15%6%5%2%26%33%55%35%54%17%20%5%26%30%10%33%29%75%73%91%Payment MethodsHow often do you use each the following methods to make payments(e.g., for shopping, for paying bills, or for any other purposes)?Debit cards tied to a bank accountOnline payments directly fromyour bank accountCashCredit cardsPaper checksPre-paid debit cardsMoney ordersTapping/waving your mobile phoneover a sensor at checkoutFrequently Sometimes Never
  • 14Payment Methods26%49%10%4%26%49%6%1%38% 39%2% 0%Credit cards Debit cards tied to abank accountPre-paid debit cards Tapping/waving yourmobile phone over asensor at checkout18-34 35-54 55+Payment methods by age
  • 15AllrespondentsHomes Underwater22% ofrespondentswho owemoney on theirhomes areunderwater14% of homeownersare underwater8% of U.S. adults are underwaterNo69%Yes,owemore22%Dontknow/Noanswer8%Do you currently owe more on yourhome than you think you could sellit for today?[among respondents who owe money on their homes]Allhome-ownersThose whoowe moneyon theirhomesUnderwater
  • 16Foreclosure & Bankruptcy3%4%2009 2012% YesHave you been involved in aforeclosure process on yourhome in the last 2 years?Have you declared bankruptcyin the last 2 years?2%4%2009 2012% Yes
  • 17Yes26% No71%Dontknow/Noanswer3%Medical DebtDo you currently have any unpaid bills from a health care or medical serviceprovider (e.g., a hospital, a doctors office, or a testing lab) that are past due?31% 30%17%32%24%11%18-34 35-54 55+Medical Debt No Health Insurance
  • 18Dontknow/Noanswer1%No79%Yes20%Student DebtDo you currently have anystudent loans?Are you concerned that you might notbe able to pay off your student loans?[among respondents with student loans]Dontknow/Noanswer5%No41%Yes54%
  • 19Financial LiteracyFive financial literacy quizquestions:• Interest rate question• Inflation question• Bond price question• Mortgage question• Risk questionNumber ofcorrect answers 2009 2012None 7% 7%One 11% 12%Two 17% 19%Three 24% 23%Four 27% 25%Five 15% 14%Average numbercorrect 2.99 2.88Take the NFCS Knowledge Quiz and see howmuch you know!
  • 20New Jersey: Capable But Clueless? CA, MA, NJ residents are most financially capable Ranked in top 5 of all states in at least 3 of 5measures of financial capability Making ends meet Planning ahead Managing financial products Financial Knowledge and decision-making (includes quiz) Average quiz score for NJ of 2.82 versus nationalaverage of 2.88 (out of 5)
  • 21NFCS Online Resources FINRA NFCS Web site: http://www.usfinancialcapability.org/• Downloadable NFCS data:http://www.usfinancialcapability.org/downloads.php• 2009 and 2012 comparison of national data:http://www.usfinancialcapability.org/results.php?region=US• NFCS Quiz: http://www.usfinancialcapability.org/quiz.php• Press release about NJ NFCS findings:http://www.finra.org/web/groups/corporate/@corp/@news/@newrel/documents/newsrelease/p269887.pdf