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Survey on Personal Finance Important Topics


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PowerPoint Presentation for Reaching Beyond eXtension to Inform Extension Programming Decisions

  • Intended application of survey results may stretch or even leap-frog when the results are so provocative that initial thoughts on boundaries of utility suggest an undercutting of potential use in a larger context. The Financial Security for All (FSA) Community of Practice (CoP) launched a survey ( for educators and the general public from November 2011 to April 2012 (n=726). The goal of the survey was to determine topics for the CoP to prioritize in articles, projects, and grant applications. Results showed some interesting geographic variations across regions of the United States and within certain individual states that perhaps is appropriate to inform Extension programming beyond While our “local” consideration is normally the online environment, free of geographic boundaries, when we look at correlations among survey answers and location of the respondents, we can conceivably impart some needs assessment knowledge to boots-on-the-ground Extension Educators and Administrators.
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Survey on Personal Finance Important Topics

  1. 1. Survey on Personal Finance Important Topics Megan O’Neil, MPS, CFCS, The University of MarylandFahzy Abdul-Rahman, Ph.D., New Mexico State University Barbara ONeill, Ph.D., Rutgers University 2012 eXtension Annual Conference October 2012
  2. 2. Methods• Survey on Personal Finance Important Topics – OPENED: November 1, 2011 to April 30th 2012 – n= 724• “The goal of this survey is to gather information on important topics in personal finance. While your participation in this survey is voluntary, your response will greatly help in designing personal finance programs to meet the publics needs.”• Google Survey Docs
  3. 3. • Family Economics News: March - April 2012 - 3/22/2012• Ken McDonnell to EBRI - Distro - ASEC_Partners 2/9/2012• Shockey, Susan Wed 2/8/2012 2:07 PM• Shockey, Susan Wed 11/2/2011 Everyone - NIFA Everyone Distribution List + family-;;; amer-‘ + fe-
  4. 4. The Survey Link•
  5. 5. PreliminaryResults• After survey creation• How to view the ready- made stats
  6. 6. To ObtainStatistics• Click “See Responses”• & select “Summary”
  7. 7. Data Set• N= 724• States with = or > 20 respondents were included for interpretation• Selected Set N=533 representing 77% of total original response• Separated regions (NE, MW, S & W)• Northeast Region (n=22) too small for further reliable analyses and comparison by region
  8. 8. 13 States Included n= %N= Alabama 28 4% Florida 36 5% Iowa 42 6% Maryland 49 7% Michigan 72 10% Minnesota 20 3% Mississippi 60 8% Missouri 24 3% Ohio 22 3% Oklahoma 47 6% Utah 28 4% Virginia 98 14% Washington 27 4%
  9. 9. Respondent Characteristics• Age18+; age 19+ (Nebraska & Alabama); range ages 18 – 80 with good bell shaped distribution• Predominantly female (81%)• Income Less than $25,000 6% $25,000 to $49,999 30% $50,000 to $74,999 28% 45% $75,000 to $99,999 17% 63% $100,000 or greater 18%• Highly educated Bachelor’s degree 28% Post college degree 54%
  10. 10. Race Ethnicity
  11. 11. Did We Survey Ourselves?
  12. 12. People in the Southern region rated themselves less knowledgeable than those in the Midwest or West rated themselves (MW 4.125/S 3.916/W 4.194 p=.0027), but overall, all people rated themselves quite knowledgeable.
  13. 13. People in the Western region reported getting theirpersonal finance information from adult education more than those from the Midwest or South (MW 3.438/S 3.280/W 3.605 p=.0223)
  14. 14. People in the Western and Midwestern regions took courses in college and/or majored in a personal finance area and/or attended workshops/talks to a significantlygreater degree (p=.0353, p=<.0001 and p=.002 respectively) than those from the South
  15. 15. Important Topics for Adults: Adult Respondents• The Western region was significantly more concerned than other regions with several topics for adults as compared to other regions (mortgages, loans, other, paying yourself first, debt and credit, scams/frauds/identity theft)• The Midwest and Western regions shared a significantly higher concern for dealing with mortgages
  16. 16. Q4: Important Personal Finance Topics for Adults - OTHER• Tax forms are so complicated it would be useful to have some classes about different forms and • How to get the most from your savings and keep it issues. estate planning credit history/ credit safe. How to fix bad credit...where do you start? cards/which banks are the best (fees vs. no fees) Will I be able to manage on Social Security? I have old credit issues, some resolved, a few not...what do I do? Will there still be Social Security? Will I win the lottery? what legislation is in the works Maybe call the workshop: Mistakes dont have to haunt you forever: How to get your good credit that will change our exemptions and savings-ir not being able to claim taxes or interest on our score back. Investing in stock market, mutual funds, money markets -- define each for mortgages. Taxing social security, etc. allocating savings during retirement to increase income personal need/goal Credit history, credit score and how to improve your "numbers" while decreasing risk of losing principal. How do I get out of the payday loan cycle. creating a spending plan Wills As my parents did, from the time my children Being underwater on your mortgage. Short sale options to get out of loan. Strategic default on home were old enough to grasp the concept of money, I urged them to plan for their futures. When they loan. Declaring bankruptcy. Dealing with aging parents finances Teach children about money graduated from college and got their first jobs, I always told them to pay themselves first, even if its How to keep track of recent changes in bank fees and charges. just a few dollars a week. That habit, over time, can lead to financial stability. the perils of Since I do not own a home and will probably not be able to save a significant down- payday lending Understand income tax. payment, affordable housing for the immediate future and certainly into retirement is a serious Keeping key financial records. concern for me. At this time due to salary I do not qualify for assistance. Rents are extremely Purpose of a will. expensive. Understanding Taxes, Marriage and Money, Financial Major consumer protection laws. Issues/Implications of Divorce, Children and Money; Foreclosure Prevention Chronic Evaluate advertising on financial services and products. spending issues(as means for social opportunities or to stuff frustration) I believe more Know how to comparison shop for financial services and products. How to get out of debt! should be done to help citizens break down the finncial implications facing the US economy. Cost of vices such as gambling Since many low income people in rural Currently one line headliners from newpapers and Congress are not clearly lining up the facts on areas have no computer access, publications on a lower educational level are needed. Someone the issues and proposed solutions. recently told me "Extensions publications are wonderful, however, someone with a low level of Credit Scoring practicies education wont/cant read them. You need something with more pictures, simply written." Credit rate practicies Estate planning - end of life issues Buying vs. Renting after the teaching children financial responsibility, teen financial literacy Need information on Estate debt crisis. My new bank removes money from my bill pay account ahead of the send Planning Correlation with healthy lifestyle; taking care of assets, being date, then take 5 business days to send the check and then the check is not cashed for 2 to three resourceful Critical thinking skills and discernment best long term care options days. Who has ownership of the money between the time when the money is taken out and the I think one of the main important topics or overriding themes is coping or adjusting to the time the person receiving the check cashed the check? I think that it should be me. My bank uncertainty and change in the economic environment at large. This affects people across the entire representative cannont tell me where the money is during the time frame. I am not sure why the range of topics cited above. I think the significant pace of change over the last several years has left representative cannot provide clarity. most people struggling to keep up. I am looking at other banks and credit unions to see what services and fees they charge for my I think those most immediately affected by the economic crisis, e.g. the unemployed, those who specific needs before I move or stay. Any suggestions? have seen a significant reduction in income, facing foreclosure, etc., are naturally having their attention focused on dealing with relatively near term personal finance concerns, like managing Lots of changes with banking - many choices for checking accounts - money cash flow & debts. Tithing Managing business investments There is a markets, saving, etc. What is best?? Crisis financial management large segment of the populace without basic information/knowledge about personal finance, such Unemployment impact as: balancing a checkbook, figuring interest, actual cost in time pay, etc. I believe correcting this Investing education, even at the adult level, should be offered starting with a very simple lack of basic knowledge should be the highest of priorities. "dummies" version...assume the participant has hardly even glanced at a stock market report. Too Finances for the single woman many programs are too complicated even at the beginner level, and those who have no experience often feel overwhelmed when instructors assume they know how to read the business pages. Estate planning Investments like gold silver oil etc. Home Repairs Mitigating risk The above-checked topics are important to me -- not necessarily others. How to repair your credit. I just wanted to be clear that for these "important Car Buying topic" questions, I checked off which topics are the most important IMHO. I think ALL of the topics listed are currently important topics. n/a Money & Marriage - communications about Emergency Preparedness Lending money to family members or friends. money Stock Market Basics Adult children moving back understanding how economic conditions will affect consumers; managing money in crisis situations; home. Saving Money at the gas pump and at the grocery store. All areas are credit scores; Mortgage Fraud and what government programs are available and safe very important. Thank you for asking. Getting out of debt. I would also include preparing What is the best way to address complaints against federal and or State banks? wills and trusts for everyone. All information I find is based on already having extra left over Why isnt the community more involved in teaching basic financial skills in HS or even elementary after the bills. What do you do if you do not have debt or extras like cable and still dont have school? How to estbalish credit. CFP stock market enough leftover for food? How do you get to the point where you are working month to month? Budgeting after loss of job or other income Basic financial literacy concepts: Consumer disclosures. Fees in banking and lending. The economy the next twenty compounded interest, why paying cash makes sense. Undestanding WHY its inportant to develope years will be nothing like the last twenty due to government deficit, entitlement program changes, money management life skills. How to teach Children about money demographic changes, etc.etc. Living within ones means is going to be more important. Taxes will Talking with boyfriends/ girlfriends about money be higher. How much house can you afford Importance of credit score I think our American culture is too. . . nice when discussing/teaching about debt management. I think debt can be helpful when doing initial business startup costs or buying a home or paying for Professional school, not undergrad. I think it is a mistake to keep telling students and clients that debt is ok as long as it is within said percentage of take home pay. I think we should view debt as the entitlement breeding cancer that it is. It destroys individuals and families and few financial professionals are bold enough to call it for what it is. I also think people should understand taxes better. They can keep better records when they know more. I also think they should know what their money is being used for,not just intended to be used for. As a single Mom, what ways can I plan to pay for my childrens college without developing life-long debt. Ensuring that banking services are available to all consumers. Dealing with financial/tax issues in blended families Tax issues to Families of Fallen Troops choosing a financial advisor CCCS and legitimte bankruptcy alternatives medical
  17. 17. Important Topics for Youth: Adult Respondents• The Western region was significantly more concerned than other regions with the following topics for Youth: paying yourself first and managing debt and credit And somewhat more concerned with the following for Youth: importance of credit history and scams/frauds/identity theft• The Southern region was somewhat more concerned for Youth with using online banking• The Midwest region was somewhat less concerned for Youth with saving and investing options
  18. 18. Important Topics for Older Adults: Adult Respondents• The Western region was significantly more concerned than other regions with the following topics for Older Adults: scams/frauds/identity theft and dealing with mortgages And somewhat more concerned with the following for Older Adults: talking about with family, knowing your consumer rights and caregiving• The Midwest and Western regions shared a somewhat higher concern for financing healthcare expenses
  19. 19. If the Sample is Reliable, What Does the Geographic Correlation Tell Us?• People living in the West will think personal finance education on almost any topic is important!• The South recognized using online banking as an important topic for Youth more than any other region. This may mean that people in the South are more aware of online banking technologies as they relate to Youth and potentially are more interested in Youth financial capabilities outreach.• The Midwest expressed less concerned for Youth with saving and investing options. Again – this may mean that Midwesterners are more aware of Youth priorities. Awareness could translate into support or nonsupport of programs.• What is happening locally and regionally in housing, in particular Mortgages, raises concern significantly for education in this topic area.
  20. 20. Discussion and Implications
  21. 21. Financially Knowledgeable Sample?• 8 of 10 respondents agreed (51%) or strongly agreed (30%) that they were financially knowledgeable• Is this really true or indication of overconfidence? – People often don’t know what they don’t know• Would be interesting to assess actual financial practices
  22. 22. A Sample of Do-It-Yourselfers?• Only 11% always and 48% sometimes get information from financial advisors• Family members rate about the same: 14% always and 45% sometimes• Are people getting information themselves or just not getting information?
  23. 23. Sources of Financial information• Mixed preferences among traditional Extension outreach methods• Always/sometimes combined percentages: – Seminars: 39% – Courses since leaving school: 53% – Newspapers/magazines: 73% – Cooperative Extension: 49% – Internet Sources: 72% – Software: 30%• 80% said their personal finance courses were “self-studied”
  24. 24. “Hot” Topics Reflect Respondents’ Age and Recent Economic Conditions• Planning for Retirement (85%)• Saving and Investing (80%)• Managing Debt and Credit (79%)• Budgeting (68%)• Managing Cash Flow (61%)• Scams, Frauds, and Identity Theft (60%)
  25. 25. Age-Specific Content PreferencesYouth Older Adults• Making Decisions About • Preparing Wills and Trusts Money (87%) (89%)• Using Credit and Credit • Managing Retirement Cards (82%) Income and Savings (88%)• Keeping Track of Money • Long-Term Care (83%) (81%) • Financing Health Care• Understanding Income and Expenses (81%) Expenses (78%) • Scams, Frauds, and Identity• Creating a Plan for Theft (77%) Spending (75%)
  26. 26. 2012 CFA/Primerica Study• Study of households earning $40k to $100k• Analyzed Federal Reserve data• Respondents rated “good to excellent” ability to budget and manage credit card debt (81%) and save for retirement (63%)• Only 15% rely on television, the Internet, or publications• Typical family had retirement savings of $27,300, down from $37,800 in 2007
  27. 27. Implications for Future eXtension Outreach• Develop new content to assist “do-it-yourselfers” (e.g., worksheets, calculators, resource guides, do- it-yourself financial planning activities)• Develop new content on priority topic areas• Use multiple methods of outreach, especially Internet and publications• Strive for increased visibility as an unbiased source of financial information