FINRA: More than half of Mississippians Live on Financial Edge

December 14, 2010

Business

Nearly six in 10 Mississippians live paycheck to paycheck.
Further, Mississippi residents on average are less financially literate than residents of other states, and fourth-most likely to use high-cost, non-bank borrowing such as payday loans.
So says an extensive survey released Tuesday by the Financial Industry Regulatory Authority, or FINRA.
The findings are part of the National Financial Capability Study, conducted by the FINRA Investor Education Foundation, which explores in-depth how Americans manage their resources and make financial decisions.
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.
Mississippians ranked below the national average in several other key areas. Results include:
*Making Ends Meet: 58 percent of Mississippians are living paycheck-to-paycheck. By comparison, 55 percent of all Americans report spending more than or about equal to their household income.
*Planning Ahead: 66 percent of Mississippi residents do not have a “rainy day” fund to cover three months of unanticipated financial emergencies. This compares to 60 percent of Americans nationwide.
*Managing Financial Products: 34 percent of Mississippians have engaged in some form of high-cost, non-bank borrowing during the last five years, including taking out a payday loan or getting an advance on a tax refund, compared to 24 percent of all Americans. This ranks Mississippians as the fourth-most likely U.S. residents to engage in such activity.
*Financial Knowledge: On a test of five basic financial literacy questions, Mississippians answered on average 2.86 financial literacy questions correctly, compared to the national average of 2.99 correct answers.
*Financial Decision-Making: 60 percent of Mississippi residents did not comparison shop for credit cards, better than the national average of 62 percent.
“This study highlights how important improving financial education is for Americans, especially during times of financial insecurity,” said FINRA Foundation Chairman Richard Ketchum. “While the current economic conditions can exacerbate the consequences of poor financial decisions, some states are still well ahead of others.”
The study represents an unprecedented collection of data on financial behaviors across all 50 states and the District of Columbia.
SOURCE: Financial Industry Regulatory Authority

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